UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-07820 | |||||
AMERICAN CENTURY CAPITAL PORTFOLIOS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 10-31 | |||||
Date of reporting period: | 04-30-2019 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | ![]() |
APRIL 30, 2019 | |
AC Alternatives® Income Fund |
Investor Class (ALNNX) |
I Class (ALNIX) |
Y Class (ALYNX) |
A Class (ALNAX) |
C Class (ALNHX) |
R Class (ALNRX) |
R6 Class (ALNDX) |
![acaltscarrotblacknobleeda06.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/acaltscarrotblacknobleeda06.jpg)
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![jthomasrev0514.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/jthomasrev0514.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
Improving Investor Sentiment, Dovish Central Banks Supported Widespread Gains
Stocks struggled early in the period, while bonds rallied. Mounting investor concerns about slowing global economic and earnings growth, U.S.-China trade tensions and rising U.S. interest rates triggered a broad stock market sell-off. Bonds, on the other hand, benefited, as global growth worries fueled demand for perceived safe-haven securities, driving government bond yields lower. Federal Reserve (Fed) policy also influenced the backdrop. Despite signs that growth was slowing, the Fed raised interest rates in December. Investors feared this rate increase and the Fed’s plans for two more rate hikes in 2019 were too aggressive, and risk-off investing remained in favor.
The new year brought a renewed sense of stability to the global financial markets. Investors’ worst-case fears about growth and trade eased, and corporate earnings results were generally better than expected. Equity valuations appeared attractive following the late-2018 stock market sell-off, and risk-on investing resumed. Meanwhile, the Fed changed course, ending its rate-hike campaign amid moderating global growth and inflation. The Fed's policy pivot along with dovish actions from central banks in the U.K., Europe and Japan helped drive yields lower and support the broad global investment landscape.
Overall, stocks shook off their early losses to generate solid gains for the entire six-month period. Similarly, other risk assets, including high-yield bonds, also delivered strong results. Elsewhere, global yields generally declined for the six-month period, which helped government, securitized and corporate bonds, real estate investment trusts, and other interest rate-sensitive securities generate positive returns.
Looking ahead, we expect volatility to remain a formidable factor as investors react to global growth trends, central bank policy and geopolitical developments. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
![image48a01.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/image48a01.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Fund Characteristics |
APRIL 30, 2019 | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 19.2% |
Asset-Backed Securities | 15.2% |
Bank Loan Obligations | 13.5% |
Collateralized Loan Obligations | 11.9% |
Corporate Bonds | 11.7% |
Commercial Mortgage-Backed Securities | 8.8% |
Exchange-Traded Funds | 3.8% |
Collateralized Mortgage Obligations | 2.7% |
Preferred Stocks | 2.7% |
Exchange-Traded Notes | 2.0% |
Convertible Bonds | —* |
Corporate Bonds Sold Short | (2.2)% |
Convertible Bonds Sold Short | (0.2)% |
Common Stocks Sold Short | (0.2)% |
Temporary Cash Investments | 11.6% |
Other Assets and Liabilities | (0.5)% |
*Category is less than 0.05% of total net assets.
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2018 to April 30, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4
Beginning Account Value 11/1/18 | Ending Account Value 4/30/19 | Expenses Paid During Period(1) 11/1/18 - 4/30/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,020.60 | $9.62 | 1.92% |
I Class | $1,000 | $1,021.70 | $8.62 | 1.72% |
Y Class | $1,000 | $1,022.40 | $7.87 | 1.57% |
A Class | $1,000 | $1,019.40 | $10.87 | 2.17% |
C Class | $1,000 | $1,015.60 | $14.59 | 2.92% |
R Class | $1,000 | $1,018.10 | $12.11 | 2.42% |
R6 Class | $1,000 | $1,021.40 | $7.87 | 1.57% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.27 | $9.59 | 1.92% |
I Class | $1,000 | $1,016.27 | $8.60 | 1.72% |
Y Class | $1,000 | $1,017.01 | $7.85 | 1.57% |
A Class | $1,000 | $1,014.03 | $10.84 | 2.17% |
C Class | $1,000 | $1,010.32 | $14.56 | 2.92% |
R Class | $1,000 | $1,012.79 | $12.08 | 2.42% |
R6 Class | $1,000 | $1,017.01 | $7.85 | 1.57% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2019 (UNAUDITED)
Principal Amount/Shares | Value | ||||||
COMMON STOCKS — 19.2% | |||||||
Air Freight and Logistics — 0.6% | |||||||
United Parcel Service, Inc., Class B | 17,047 | $ | 1,810,732 | ||||
Automobiles — 0.2% | |||||||
General Motors Co. | 14,728 | 573,656 | |||||
Beverages — 0.6% | |||||||
Coca-Cola European Partners plc | 36,205 | 1,940,226 | |||||
Biotechnology — 0.5% | |||||||
AbbVie, Inc. | 6,418 | 509,525 | |||||
Amgen, Inc. | 2,774 | 497,434 | |||||
Gilead Sciences, Inc. | 8,226 | 535,019 | |||||
1,541,978 | |||||||
Chemicals — 0.7% | |||||||
Air Products & Chemicals, Inc. | 8,295 | 1,707,028 | |||||
Eastman Chemical Co. | 7,109 | 560,758 | |||||
2,267,786 | |||||||
Commercial Services and Supplies — 0.2% | |||||||
KAR Auction Services, Inc. | 10,807 | 610,379 | |||||
Communications Equipment — 0.2% | |||||||
Cisco Systems, Inc. | 12,298 | 688,073 | |||||
Containers and Packaging — 1.3% | |||||||
Packaging Corp. of America | 5,977 | 592,679 | |||||
Sonoco Products Co. | 30,669 | 1,933,987 | |||||
Westrock Co. | 40,014 | 1,535,738 | |||||
4,062,404 | |||||||
Distributors — 0.6% | |||||||
Genuine Parts Co. | 17,681 | 1,813,010 | |||||
Electric Utilities — 0.6% | |||||||
Alliant Energy Corp. | 38,124 | 1,800,596 | |||||
Electrical Equipment — 0.2% | |||||||
Hubbell, Inc. | 5,342 | 681,639 | |||||
Equity Real Estate Investment Trusts (REITs) — 5.1% | |||||||
AIMS APAC REIT | 399,388 | 416,975 | |||||
Automotive Properties Real Estate Investment Trust | 49,582 | 394,524 | |||||
Befimmo SA | 6,686 | 383,805 | |||||
Brixmor Property Group, Inc. | 31,213 | 558,089 | |||||
CapitaLand Retail China Trust | 287,793 | 319,516 | |||||
Centuria Industrial REIT | 184,875 | 393,662 | |||||
Colony Capital, Inc. | 96,188 | 494,406 | |||||
CT Real Estate Investment Trust | 33,746 | 355,168 | |||||
Dream Global Real Estate Investment Trust | 8,100 | 83,376 | |||||
Dream Industrial Real Estate Investment Trust | 62,617 | 538,440 | |||||
Fortune Real Estate Investment Trust | 369,000 | 477,978 |
6
Principal Amount/Shares | Value | ||||||
Frasers Logistics & Industrial Trust | 373,539 | $ | 324,076 | ||||
GLP J-Reit | 360 | 387,856 | |||||
HCP, Inc. | 19,139 | 569,959 | |||||
ICADE | 4,594 | 393,456 | |||||
Invesco Office J-Reit, Inc. | 3,487 | 532,045 | |||||
Keppel DC REIT | 346,800 | 384,881 | |||||
Kimco Realty Corp. | 28,496 | 495,545 | |||||
Kiwi Property Group Ltd. | 392,753 | 404,071 | |||||
Klepierre SA | 15,528 | 551,615 | |||||
Mercialys SA | 26,730 | 351,387 | |||||
MGM Growth Properties LLC, Class A | 17,700 | 571,002 | |||||
New South Resources Ltd.(1) | 405,399 | 511,563 | |||||
Northview Apartment Real Estate Investment Trust | 25,723 | 541,072 | |||||
NSI NV | 9,563 | 378,649 | |||||
Park Hotels & Resorts, Inc. | 9,946 | 319,068 | |||||
QTS Realty Trust, Inc., Class A | 12,178 | 552,272 | |||||
STAG Industrial, Inc. | 18,158 | 522,587 | |||||
Star Asia Investment Corp. | 561 | 546,873 | |||||
Sunlight Real Estate Investment Trust | 611,500 | 449,840 | |||||
Ventas, Inc. | 8,700 | 531,657 | |||||
VEREIT, Inc. | 68,602 | 566,653 | |||||
VICI Properties, Inc. | 24,907 | 567,880 | |||||
Vicinity Centres | 284,585 | 509,585 | |||||
Viva Energy REIT | 201,834 | 349,997 | |||||
15,729,528 | |||||||
Food Products — 0.7% | |||||||
Bunge Ltd. | 31,719 | 1,662,393 | |||||
Hershey Co. (The) | 5,203 | 649,594 | |||||
2,311,987 | |||||||
Gas Utilities — 0.3% | |||||||
National Fuel Gas Co. | 13,209 | 782,105 | |||||
Hotels, Restaurants and Leisure — 0.4% | |||||||
Carnival Corp. | 10,255 | 562,590 | |||||
International Game Technology plc | 35,583 | 520,579 | |||||
1,083,169 | |||||||
Household Durables — 0.9% | |||||||
Garmin Ltd. | 24,735 | 2,120,779 | |||||
Whirlpool Corp. | 4,583 | 636,212 | |||||
2,756,991 | |||||||
Machinery — 0.2% | |||||||
Cummins, Inc. | 3,892 | 647,201 | |||||
Media† | |||||||
Pacifico, Inc. | 883 | 7,505 | |||||
Metals and Mining — 0.7% | |||||||
Southern Copper Corp. | 54,824 | 2,106,338 | |||||
Mortgage Real Estate Investment Trusts (REITs) — 0.9% | |||||||
Granite Point Mortgage Trust, Inc. | 36,704 | 705,818 |
7
Principal Amount/Shares | Value | ||||||
MFA Financial, Inc. | 68,138 | $ | 511,716 | ||||
Starwood Property Trust, Inc. | 33,637 | 775,333 | |||||
TPG RE Finance Trust, Inc. | 35,801 | 705,638 | |||||
2,698,505 | |||||||
Multi-Utilities — 1.8% | |||||||
Dominion Energy, Inc. | 24,223 | 1,886,245 | |||||
DTE Energy Co. | 14,479 | 1,820,155 | |||||
Public Service Enterprise Group, Inc. | 31,443 | 1,875,575 | |||||
5,581,975 | |||||||
Oil, Gas and Consumable Fuels — 1.7% | |||||||
Occidental Petroleum Corp. | 26,101 | 1,536,827 | |||||
Phillips 66 | 18,413 | 1,735,794 | |||||
Valero Energy Corp. | 21,325 | 1,933,324 | |||||
5,205,945 | |||||||
Pharmaceuticals — 0.2% | |||||||
Johnson & Johnson | 4,376 | 617,891 | |||||
Specialty Retail — 0.2% | |||||||
Penske Automotive Group, Inc. | 12,243 | 562,199 | |||||
Textiles, Apparel and Luxury Goods — 0.2% | |||||||
Tapestry, Inc. | 15,418 | 497,539 | |||||
Trading Companies and Distributors — 0.2% | |||||||
MSC Industrial Direct Co., Inc., Class A | 6,846 | 572,668 | |||||
TOTAL COMMON STOCKS (Cost $55,919,251) | 58,952,025 | ||||||
ASSET-BACKED SECURITIES — 15.2% | |||||||
AmeriCredit Automobile Receivables, Series 2015-4, Class D, 3.72%, 12/8/21 | $ | 80,000 | 80,636 | ||||
Avant Loans Funding Trust, Series 2017-A, Class C, 6.05%, 5/15/24(2) | 900,000 | 903,129 | |||||
Avant Loans Funding Trust, Series 2017-B, Class C, 4.99%, 11/15/23(2) | 500,000 | 502,613 | |||||
Avant Loans Funding Trust, Series 2018-B, Class A SEQ, 3.42%, 1/18/22(2) | 618,042 | 619,271 | |||||
Avant Loans Funding Trust, Series 2019-A, Class B, 3.80%, 12/15/22(2) | 1,000,000 | 1,004,558 | |||||
Bear Stearns Asset Backed Securities Trust, Series 2007-2, Class A2, VRN, 2.80%, (1-month LIBOR plus 0.32%), 1/25/47 | 41,330 | 41,381 | |||||
CAL Funding II Ltd., Series 2012-1A, Class A SEQ, 3.47%, 10/25/27(2) | 617,750 | 618,301 | |||||
CAL Funding II Ltd., Series 2013-1A, Class A SEQ, 3.35%, 3/27/28(2) | 180,167 | 179,671 | |||||
Carmax Auto Owner Trust, Series 2018-4, Class D, 4.15%, 4/15/25 | 1,000,000 | 1,022,723 | |||||
CFG Investments Ltd., Series 2017-1, Class A SEQ, 7.87%, 11/15/26(2) | 1,000,000 | 1,008,683 | |||||
CFG Investments Ltd., Series 2017-1, Class B, 9.42%, 11/15/26(2) | 1,000,000 | 1,017,639 | |||||
CLI Funding V LLC, Series 2013-2A, SEQ, 3.22%, 6/18/28(2) | 239,202 | 238,493 | |||||
CLI Funding V LLC, Series 2014-1A, Class A SEQ, 3.29%, 6/18/29(2) | 704,497 | 701,834 |
8
Principal Amount/Shares | Value | ||||||
CLI Funding V LLC, Series 2014-2A, Class A SEQ, 3.38%, 10/18/29(2) | $ | 307,116 | $ | 306,257 | |||
Coinstar Funding LLC Series, Series 2017-1A, Class A2 SEQ, 5.22%, 4/25/47(2) | 490,000 | 499,958 | |||||
Conn's Receivables Funding LLC, Series 2018-A, Class A SEQ, 3.25%, 1/15/23(2) | 183,496 | 183,832 | |||||
Conn's Receivables Funding LLC, Series 2018-A, Class B, 4.65%, 1/15/23(2) | 558,030 | 561,067 | |||||
Conn's Receivables Funding LLC, Series 2019-A, Class A SEQ, 3.40%, 10/16/23(2) | 1,000,000 | 1,001,241 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class C SEQ, 3.42%, 8/16/21(2) | 139,695 | 139,830 | |||||
CPS Auto Receivables Trust, Series 2015-C, Class D SEQ, 4.63%, 8/16/21(2) | 207,000 | 209,300 | |||||
CPS Auto Trust, Series 2016-D, Class D SEQ, 4.53%, 1/17/23(2) | 750,000 | 763,848 | |||||
Credit Suisse ABS Trust, Series 2018-LD1, Class A SEQ, 3.42%, 7/25/24(2) | 296,801 | 297,155 | |||||
Credit Suisse ABS Trust, Series 2018-LD1, Class B, 4.28%, 7/25/24(2) | 750,000 | 752,573 | |||||
Credit Suisse ABS Trust, Series 2018-LD1, Class C, 5.17%, 7/25/24(2) | 600,000 | 607,097 | |||||
Cronos Containers Program I Ltd., Series 2013-1A, Class A SEQ, 3.08%, 4/18/28(2) | 506,000 | 501,899 | |||||
Drive Auto Receivables Trust, Series 2015-AA, Class D, 4.12%, 7/15/22(2) | 201,569 | 202,202 | |||||
Drive Auto Receivables Trust, Series 2017-2, Class D, 3.49%, 9/15/23 | 1,000,000 | 1,006,632 | |||||
DT Auto Owner Trust, Series 2015-2A, Class D, 4.25%, 2/15/22(2) | 190,387 | 190,533 | |||||
DT Auto Owner Trust, Series 2016-1A, Class D, 4.66%, 12/15/22(2) | 780,066 | 786,508 | |||||
DT Auto Owner Trust, Series 2016-3A, Class D, 4.52%, 6/15/23(2) | 395,770 | 399,728 | |||||
DT Auto Owner Trust, Series 2017-2A, Class D, 3.89%, 1/15/23(2) | 800,000 | 804,494 | |||||
Element Rail Leasing II LLC, Series 2015-1A, Class A2, SEQ, 3.59%, 2/19/45(2) | 1,225,000 | 1,227,424 | |||||
Exeter Automobile Receivables Trust, Series 2015-1A, Class C, 4.10%, 12/15/20(2) | 247,343 | 247,796 | |||||
Exeter Automobile Receivables Trust, Series 2015-1A, Class D, 5.83%, 12/15/21(2) | 1,000,000 | 1,008,857 | |||||
Exeter Automobile Receivables Trust, Series 2015-3A, Class D, 6.55%, 10/17/22(2) | 600,000 | 617,580 | |||||
Exeter Automobile Receivables Trust, Series 2016-2A, Class D, 8.25%, 4/17/23(2) | 1,000,000 | 1,065,224 | |||||
Exeter Automobile Receivables Trust, Series 2016-3A, Class D, 6.40%, 7/17/23(2) | 350,000 | 361,377 | |||||
Freed Abs Trust, Series 2018-2, Class A SEQ, 3.99%, 10/20/25(2) | 472,081 | 475,287 | |||||
Global SC Finance II SRL, Series 2013-1A, Class A SEQ, 2.98%, 4/17/28(2) | 140,000 | 138,756 | |||||
Global SC Finance II SRL, Series 2014-1A, Class A2 SEQ, 3.09%, 7/17/29(2) | 732,375 | 723,139 | |||||
HERO Funding Trust, Series 2016-4A, Class A2 SEQ, 4.29%, 9/20/47(2) | 538,619 | 553,587 |
9
Principal Amount/Shares | Value | ||||||
HERO Funding Trust, Series 2017-2A, Class A2 SEQ, 4.07%, 9/20/48(2) | $ | 353,692 | $ | 359,749 | |||
Hertz Vehicle Financing II LP, Series 2016-2A, Class B, 3.94%, 3/25/22(2) | 262,800 | 264,505 | |||||
Hertz Vehicle Financing II LP, Series 2016-2A, Class C, 4.99%, 3/25/22(2) | 370,000 | 377,048 | |||||
Hertz Vehicle Financing II LP, Series 2017-2A, Class B, 4.20%, 10/25/23(2) | 1,475,000 | 1,505,323 | |||||
Invitation Homes Trust, Series 2018-SFR2, Class D, VRN, 3.92%, (1-month LIBOR plus 1.45%), 6/17/37(2) | 1,000,000 | 998,976 | |||||
Invitation Homes Trust, Series 2018-SFR3, Class B, VRN, 3.62%, (1-month LIBOR plus 1.15%), 7/17/37(2) | 185,000 | 184,385 | |||||
Invitation Homes Trust, Series 2018-SFR3, Class C, VRN, 3.77%, (1-month LIBOR plus 1.30%), 7/17/37(2) | 370,000 | 370,436 | |||||
Kabbage Funding LLC, Series 2019-1, Class C, 4.61%, 3/15/24(2) | 635,571 | 640,902 | |||||
Mariner Finance Issuance Trust, Series 2017-AA, Class A SEQ, 3.62%, 2/20/29(2) | 524,804 | 526,322 | |||||
Mariner Finance Issuance Trust, Series 2017-AA, Class C, 6.73%, 2/20/29(2) | 800,000 | 826,952 | |||||
Mariner Finance Issuance Trust, Series 2017-BA, Class A SEQ, 2.92%, 12/20/29(2) | 700,000 | 697,282 | |||||
Marlette Funding Trust, Series 2017-2A, Class C, 4.58%, 7/15/24(2) | 1,000,000 | 1,009,583 | |||||
Marlette Funding Trust, Series 2017-3A, Class B, 3.01%, 12/15/24(2) | 1,000,000 | 998,996 | |||||
Marlette Funding Trust, Series 2017-3A, Class C, 4.01%, 12/15/24(2) | 500,000 | 501,735 | |||||
Marlette Funding Trust, Series 2018-2A, Class C, 4.37%, 7/17/28(2) | 850,000 | 860,148 | |||||
MVW Owner Trust, Series 2014-1A, Class A SEQ, 2.25%, 9/22/31(2) | 776,758 | 768,849 | |||||
New Residential Mortgage LLC, Series 2018-FNT1, Class E, 4.89%, 5/25/23(2) | 846,986 | 855,046 | |||||
OneMain Financial Issuance Trust, Series 2015-1A, Class C, 5.12%, 3/18/26(2) | 981,000 | 992,722 | |||||
OneMain Financial Issuance Trust, Series 2016-2A, Class A SEQ, 4.10%, 3/20/28(2) | 36,227 | 36,306 | |||||
OneMain Financial Issuance Trust, Series 2016-2A, Class B, 5.94%, 3/20/28(2) | 1,000,000 | 1,006,431 | |||||
OneMain Financial Issuance Trust, Series 2016-3A, Class A SEQ, 3.83%, 6/18/31(2) | 475,000 | 484,173 | |||||
OneMain Financial Issuance Trust, Series 2017-1A, Class D, 4.52%, 9/14/32(2) | 2,500,000 | 2,484,704 | |||||
Sierra Timeshare Receivables Funding LLC, Series 2015-2A, Class B, 3.02%, 6/20/32(2) | 644,019 | 638,326 | |||||
Skopos Auto Receivables Trust, Series 2015-2A, Class B, 5.71%, 2/15/21(2) | 22,716 | 22,743 | |||||
Sofi Consumer Loan Program Trust, Series 2018-2, Class B, 3.79%, 4/26/27(2) | 650,000 | 660,154 | |||||
Springleaf Funding Trust, Series 2015-AA, Class A SEQ, 3.16%, 11/15/24(2) | 52,083 | 52,090 | |||||
Springleaf Funding Trust, Series 2015-AA, Class B, 3.62%, 11/15/24(2) | 130,000 | 130,138 | |||||
TAL Advantage V LLC, Series 2014-1A, Class A SEQ, 3.51%, 2/22/39(2) | 379,417 | 379,542 |
10
Principal Amount/Shares | Value | ||||||
TAL Advantage V LLC, Series 2014-3A, Class A SEQ, 3.27%, 11/21/39(2) | $ | 167,500 | $ | 166,744 | |||
Triton Container Finance IV LLC, Series 2017-2A, Class A SEQ, 3.62%, 8/20/42(2) | 848,117 | 845,767 | |||||
United Auto Credit Securitization Trust, Series 2018-2, Class D, 4.26%, 5/10/23(2) | 1,000,000 | 1,006,849 | |||||
Vantage Data Centers Issuer LLC, Series 2018-1A, Class A2 SEQ, 4.07%, 2/16/43(2) | 1,482,500 | 1,501,758 | |||||
Vertical Bridge CC LLC, Series 2016-2A, Class A SEQ, 5.19%, 10/15/46(2) | 972,810 | 992,939 | |||||
TOTAL ASSET-BACKED SECURITIES (Cost $46,501,180) | 46,719,736 | ||||||
BANK LOAN OBLIGATIONS(3) — 13.5% | |||||||
Aerospace and Defense — 0.3% | |||||||
LifeMiles Ltd., Term Loan B, 8/18/22(4) | 680,000 | 687,650 | |||||
Sequa Mezzanine Holdings LLC, 1st Lien Term Loan, 7.78%, (1-month LIBOR plus 5.00%), 11/28/21 | 240,287 | 238,085 | |||||
925,735 | |||||||
Airlines — 0.3% | |||||||
Allegiant Travel Company, Term Loan B, 7.23%, (3-month LIBOR plus 4.50%), 2/5/24 | 1,000,000 | 1,002,500 | |||||
Auto Components — 0.3% | |||||||
Adient US LLC, Term Loan B, 4/25/24(4) | 500,000 | 500,860 | |||||
Truck Hero, Inc., 1st Lien Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 4/21/24 | 498,731 | 476,288 | |||||
977,148 | |||||||
Automobiles — 0.1% | |||||||
Thor Industries, Inc., EUR Term Loan B, 2/1/26(4) | EUR | 187,696 | 206,134 | ||||
Thor Industries, Inc., USD Term Loan B, 6.31%, (1-month LIBOR plus 3.75%), 2/1/26 | $ | 227,292 | 223,740 | ||||
429,874 | |||||||
Beverages — 0.3% | |||||||
Refresco Group BV, USD Term Loan B3, 3/28/25(4) | 1,000,000 | 1,003,750 | |||||
Building Products — 0.2% | |||||||
84 Lumber Company, 2017 Term Loan B, 7.73%, (1-month LIBOR plus 5.25%), 10/25/23 | 474,892 | 476,673 | |||||
NCI Building Systems, Inc., 2018 Term Loan, 6.35%, (3-month LIBOR plus 3.75%), 4/12/25 | 242,161 | 239,335 | |||||
716,008 | |||||||
Commercial Services and Supplies — 1.3% | |||||||
Allied Universal Holdco LLC, Incremental Term Loan, 6.73%, (1-month LIBOR plus 4.25%), 7/28/22 | 997,500 | 987,775 | |||||
Asurion LLC, 2018 Term Loan B6, 5.48%, (1-month LIBOR plus 3.00%), 11/3/23 | 237,456 | 238,551 | |||||
Constellis Holdings, LLC, 2017 1st Lien Term Loan, 4/21/24(4) | 800,000 | 768,000 | |||||
Quad/Graphics, Inc., 2018 Term Loan B, 7.49%, (1-month LIBOR plus 5.00%), 1/31/26 | 1,000,000 | 1,006,250 | |||||
Syniverse Holdings, Inc., 2018 1st Lien Term Loan, 7.47%, (1-month LIBOR plus 5.00%), 3/9/23 | 64,083 | 61,215 | |||||
TNS, Inc., 2013 Term Loan B, 6.59%, (3-month LIBOR plus 4.00%), 8/14/22 | 247,212 | 245,976 |
11
Principal Amount/Shares | Value | ||||||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | $ | 39,895 | $ | 38,708 | |||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | 379,229 | 367,949 | |||||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | 63,379 | 61,494 | |||||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | 1,576 | 1,529 | |||||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | 136,583 | 132,520 | |||||
West Corporation, 2017 Term Loan, 6.63%, (3-month LIBOR plus 4.00%), 10/10/24 | 125,560 | 121,825 | |||||
4,031,792 | |||||||
Communications Equipment — 1.4% | |||||||
Avaya, Inc., 2018 Term Loan B, 6.72%, (1-month LIBOR plus 4.25%), 12/15/24 | 746,222 | 749,333 | |||||
Coral-US Co-Borrower, LLC, Term Loan B4, 5.73%, (1-month LIBOR plus 3.25%), 1/30/26 | 874,667 | 879,534 | |||||
Cumulus Media New Holdings Inc., Exit Term Loan, 6.99%, (1-month LIBOR plus 4.50%), 5/15/22 | 1,000,000 | 993,375 | |||||
Digicel International Finance Limited, 2017 Term Loan B, 5.88%, (3-month LIBOR plus 3.25%), 5/28/24 | 698,228 | 628,077 | |||||
Lands End, Inc., Term Loan B, 5.73%, (1-month LIBOR plus 3.25%), 4/4/21 | 396,759 | 386,840 | |||||
MH Sub I, LLC, 2017 1st Lien Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 9/13/24 | 758,934 | 760,357 | |||||
4,397,516 | |||||||
Construction Materials — 0.1% | |||||||
U.S. Lumber Group, LLC, 2018 Term Loan B, 8.23%, (1-month LIBOR plus 5.75%), 9/18/25 | 173,601 | 170,998 | |||||
Consumer Finance — 0.2% | |||||||
Financial & Risk US Holdings, Inc., 2018 USD Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 10/1/25 | 748,125 | 741,268 | |||||
Containers and Packaging — 1.3% | |||||||
HNVR Holdco Limited, EUR Incremental Term Loan B, 9/12/25(4) | EUR | 1,000,000 | 1,129,429 | ||||
Lifescan Global Corporation, 2018 1st Lien Term Loan, 9/27/24(4) | $ | 1,000,000 | 986,250 | ||||
Perstorp Holding AB, EUR Term Loan B, 3/31/26(4) | EUR | 1,000,000 | 1,108,983 | ||||
Strategic Partners Acquisition Corp., 2016 Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 6/30/23 | $ | 864,179 | 864,179 | ||||
4,088,841 | |||||||
Diversified Consumer Services† | |||||||
Moran Foods LLC, Term Loan, 8.60%, (3-month LIBOR plus 6.00%), 12/5/23 | 129,613 | 71,287 | |||||
Diversified Financial Services — 0.5% | |||||||
Camelot UK Holdco Limited, 2017 Repriced Term Loan, 5.73%, (1-month LIBOR plus 3.25%), 10/3/23 | 5,747 | 5,748 | |||||
Camelot UK Holdco Limited, 2017 Repriced Term Loan, 5.73%, (1-month LIBOR plus 3.25%), 10/3/23 | 81,741 | 81,750 | |||||
Camelot UK Holdco Limited, 2017 Repriced Term Loan, 5.73%, (1-month LIBOR plus 3.25%), 10/3/23 | 143,528 | 143,543 | |||||
Camelot UK Holdco Limited, 2017 Repriced Term Loan, 5.73%, (1-month LIBOR plus 3.25%), 10/3/23 | 11,335 | 11,337 |
12
Principal Amount/Shares | Value | ||||||
IG Investment Holdings, LLC, 2018 1st Lien Term Loan, 5/23/25(4) | $ | 750,000 | $ | 751,249 | |||
Tempo Acquisition LLC, Term Loan, 5.48%, (1-month LIBOR plus 3.00%), 5/1/24 | 532,365 | 533,696 | |||||
1,527,323 | |||||||
Diversified Telecommunication Services — 1.5% | |||||||
Frontier Communications Corp., 2017 Term Loan B1, 6.24%, (1-month LIBOR plus 3.75%), 6/15/24 | 477,845 | 467,292 | |||||
Intelsat Jackson Holdings S.A., 2017 Term Loan B3, 6.23%, (1-month LIBOR plus 3.75%), 11/27/23 | 1,099,619 | 1,100,719 | |||||
Sprint Communications, Inc., 2018 Term Loan B, 5.50%, (1-month LIBOR plus 3.00%), 2/2/24 | 997,500 | 984,617 | |||||
Windstream Services, LLC, Repriced Term Loan B6, 10.50%, (Prime plus 5.00%), 3/29/21 | 1,323,523 | 1,353,487 | |||||
Windstream Services, LLC, Term Loan B7, 9.75%, (Prime plus 4.25%), 2/17/24 | 552,254 | 561,643 | |||||
4,467,758 | |||||||
Electric Utilities — 0.1% | |||||||
Gamma Infrastructure III B.V., EUR 1st Lien Term Loan B, 3.50%, (6-month Euribor plus 3.50%), 1/9/25 | EUR | 163,587 | 181,416 | ||||
Energy Equipment and Services — 0.2% | |||||||
EMG Utica, LLC, Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 3/27/20 | $ | 497,416 | 497,884 | ||||
Entertainment — 0.2% | |||||||
DHX Media Ltd., Term Loan B, 6.23%, (1-month LIBOR plus 3.75%), 12/29/23 | 800,000 | 770,000 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.1% | |||||||
Communications Sales & Leasing, Inc., 2017 Term Loan B, 7.48%, (1-month LIBOR plus 5.00%), 10/24/22 | 217,554 | 214,834 | |||||
Food and Staples Retailing — 0.1% | |||||||
Albertsons, LLC, Term Loan B7, 5.48%, (1-month LIBOR plus 3.00%), 11/17/25 | 199,995 | 200,475 | |||||
Health Care Providers and Services — 0.4% | |||||||
Envision Healthcare Corporation, 2018 1st Lien Term Loan, 6.23%, (1-month LIBOR plus 3.75%), 10/10/25 | 249,375 | 241,384 | |||||
Tivity Health Inc, Term Loan A, 6.73%, (1-month LIBOR plus 4.25%), 3/5/24 | 922,857 | 915,935 | |||||
1,157,319 | |||||||
Hotels, Restaurants and Leisure† | |||||||
NPC International, Inc., 1st Lien Term Loan, 5.98%, (1-month LIBOR plus 3.50%), 4/19/24 | 62,987 | 52,397 | |||||
NPC International, Inc., 1st Lien Term Loan, 5.98%, (1-month LIBOR plus 3.50%), 4/19/24 | 44,483 | 37,005 | |||||
89,402 | |||||||
Insurance — 0.2% | |||||||
Hub International Limited, 2018 Term Loan B, 5.29%, (2-month LIBOR plus 2.75%), 4/25/25 | 1,250 | 1,239 | |||||
Hub International Limited, 2018 Term Loan B, 5.34%, (3-month LIBOR plus 2.75%), 4/25/25 | 495,000 | 490,669 | |||||
491,908 | |||||||
Interactive Media and Services — 0.1% | |||||||
AppLovin Corporation, 2018 Term Loan B, 6.23%, (1-month LIBOR plus 3.75%), 8/15/25 | 346,684 | 347,984 |
13
Principal Amount/Shares | Value | ||||||
IT Services — 0.3% | |||||||
Blackhawk Network Holdings, Inc, 2018 1st Lien Term Loan, 5.48%, (1-month LIBOR plus 3.00%), 6/15/25 | $ | 997,487 | $ | 998,530 | |||
Machinery — 0.1% | |||||||
AI Alpine AT Bidco GmbH, 2018 EUR Term Loan B, 3.50%, (3-month Euribor plus 3.50%), 10/31/25 | EUR | 210,729 | 235,636 | ||||
AI Alpine AT Bidco GmbH, 2018 USD Term Loan B, 5.99%, (3-month LIBOR plus 3.25%), 10/31/25 | $ | 47,621 | 47,204 | ||||
282,840 | |||||||
Media — 0.4% | |||||||
Checkout Holding Corp., First Out Term Loan, 9.97%, (1-month LIBOR plus 7.50%), 2/15/23 | 44,648 | 38,063 | |||||
Checkout Holding Corp., Last Out Term Loan, 1-month LIBOR plus 1.00% Cash and 9.50% PIK, 8/15/23 | 54,903 | 27,177 | |||||
Getty Images, Inc., 2019 EUR Term Loan B, 2/19/26(4) | EUR | 1,000,000 | 1,119,733 | ||||
1,184,973 | |||||||
Oil, Gas and Consumable Fuels — 0.8% | |||||||
California Resources Corporation, 2017 1st Lien Term Loan, 7.23%, (1-month LIBOR plus 4.75%), 12/31/22 | $ | 750,000 | 729,562 | ||||
Contura Energy, Inc., 2017 Term Loan, 11/10/25(4) | 1,000,000 | 1,001,250 | |||||
Murray Energy Corporation, 2018 Term Loan B2, 9.88%, (3-month LIBOR plus 7.25%), 10/17/22 | 870,253 | 697,073 | |||||
2,427,885 | |||||||
Pharmaceuticals — 0.5% | |||||||
Alvogen Pharma US, Inc., 2018 Term Loan B, 7.23%, (1-month LIBOR plus 4.75%), 4/2/22 | 493,590 | 470,147 | |||||
Valeant Pharmaceuticals International, Inc., 2018 Term Loan B, 5.48%, (1-month LIBOR plus 3.00%), 6/2/25 | 948,718 | 954,106 | |||||
1,424,253 | |||||||
Professional Services — 0.9% | |||||||
Dun & Bradstreet Corporation (The), Term Loan, 7.48%, (1-month LIBOR plus 5.00%), 2/1/26 | 1,000,000 | 1,008,755 | |||||
KUEHG Corp., 2018 Incremental Term Loan, 6.35%, (3-month LIBOR plus 3.75%), 2/21/25 | 369,956 | 370,708 | |||||
KUEHG Corp., 2018 Incremental Term Loan, 6.35%, (3-month LIBOR plus 3.75%), 2/21/25 | 128,788 | 129,050 | |||||
KUEHG Corp., 2018 Incremental Term Loan, 2/21/25(4) | 1,250,000 | 1,252,544 | |||||
2,761,057 | |||||||
Software — 0.4% | |||||||
STG-Fairway Acquisitions, Inc., 2015 1st Lien Term Loan, 7.73%, (1-month LIBOR plus 5.25%), 6/30/22 | 491,348 | 491,348 | |||||
Weld North Education, LLC, Term Loan B, 6.85%, (3-month LIBOR plus 4.25%), 2/7/25 | 136,995 | 137,166 | |||||
Weld North Education, LLC, Term Loan B, 2/7/25(4) | 500,000 | 500,625 | |||||
1,129,139 | |||||||
Specialty Retail — 0.3% | |||||||
General Nutrition Centers, Inc., 2018 Term Loan B, 11.24%, (1-month LIBOR plus 8.75%), 3/4/21 | 865,362 | 825,517 | |||||
Technology Hardware, Storage and Peripherals — 0.2% | |||||||
4L Technologies Inc., 1st Lien Term Loan, 5/8/20(4) | 696,180 | 667,463 |
14
Principal Amount/Shares | Value | ||||||
Transportation Infrastructure — 0.4% | |||||||
Daseke, Inc., 2017 Term Loan B, 7.48%, (1-month LIBOR plus 5.00%), 2/27/24 | $ | 497,481 | $ | 501,834 | |||
Savage Enterprises LLC, 2018 1st Lien Term Loan B, 6.98%, (1-month LIBOR plus 4.50%), 8/1/25 | 317,279 | 320,320 | |||||
YRC Worldwide, Inc., 2017 Term Loan, 10.98%, (1-month LIBOR plus 8.50%), 7/24/22 | 499,381 | 493,853 | |||||
1,316,007 | |||||||
TOTAL BANK LOAN OBLIGATIONS (Cost $41,436,738) | 41,520,684 | ||||||
COLLATERALIZED LOAN OBLIGATIONS — 11.9% | |||||||
ALM XVIII Ltd., Series 2016-18A, Class CR, VRN, 5.60%, (3-month LIBOR plus 3.00%), 1/15/28(2) | 1,000,000 | 973,049 | |||||
AMMC CLO XII Ltd., Series 2013-12A, Class ER, VRN, 8.88%, (3-month LIBOR plus 6.18%), 11/10/30(2) | 1,000,000 | 946,235 | |||||
Ares XLI CLO Ltd., Series 2016-41A, Class D, VRN, 6.80%, (3-month LIBOR plus 4.20%), 1/15/29(2) | 1,000,000 | 1,004,711 | |||||
Ares XXXIII CLO Ltd., Series 2015-1A, Class E, VRN, 9.10%, (3-month LIBOR plus 6.50%), 12/5/25(2) | 700,000 | 646,874 | |||||
Ares XXXVII CLO Ltd., Series 2015-4A, Class CR, VRN, 5.25%, (3-month LIBOR plus 2.65%), 10/15/30(2) | 750,000 | 725,273 | |||||
Atrium XII, Series 2012-A, Class DR, VRN, 5.39%, (3-month LIBOR plus 2.80%), 4/22/27(2) | 2,000,000 | 1,953,417 | |||||
Ballyrock CLO Ltd., Series 2018-1A, Class C, VRN, 5.74%, (3-month LIBOR plus 3.15%), 4/20/31(2) | 800,000 | 760,376 | |||||
Benefit Street Partners CLO VII Ltd., Series 2015-VIIA, Class A1AR, VRN, 3.38%, (3-month LIBOR plus 0.78%), 7/18/27(2) | 500,000 | 498,112 | |||||
BlueMountain CLO Ltd., Series 2015-4A, Class FR, VRN, 10.59%, (3-month LIBOR plus 8.00%), 4/20/30(2) | 750,000 | 690,519 | |||||
BlueMountain CLO XXIII Ltd., Series 2018-23A, Class D, VRN, 5.49%, (3-month LIBOR plus 2.90%), 10/20/31(2) | 500,000 | 483,067 | |||||
Bowman Park CLO Ltd., Series 2014-1A, Class AR, VRN, 3.83%, (3-month LIBOR plus 1.18%), 11/23/25(2) | 318,152 | 318,650 | |||||
Carlyle Global Market Strategies CLO Ltd., Series 2014-1A, Class DR, VRN, 5.19%, (3-month LIBOR plus 2.60%), 4/17/31(2) | 1,000,000 | 949,701 | |||||
CIFC Funding Ltd., Series 2013-1A, Class DR, VRN, 9.25%, (3-month LIBOR plus 6.65%), 7/16/30(2) | 1,000,000 | 972,502 | |||||
CIFC Funding Ltd., Series 2016-1A, Class D, VRN, 6.59%, (3-month LIBOR plus 4.00%), 10/21/28(2) | 1,000,000 | 1,001,570 | |||||
Garrison Funding Ltd., Series 2015-1A, Class CR, VRN, 6.55%, (3-month LIBOR plus 3.90%), 9/21/29(2) | 1,000,000 | 994,510 | |||||
Harbourview CLO VII Ltd., Series 2007-RA, Class D, VRN, 5.96%, (3-month LIBOR plus 3.36%), 7/18/31(2) | 2,000,000 | 1,932,984 | |||||
Highbridge Loan Management Ltd., Series 2011-A17, Class D, VRN, 4.83%, (3-month LIBOR plus 3.60%) 5/6/30(2) | 1,750,000 | 1,751,094 | |||||
Jamestown CLO IV Ltd., Series 2014-4A, Class CR, VRN, 5.25%, (3-month LIBOR plus 2.65%), 7/15/26(2) | 1,000,000 | 981,429 | |||||
Jamestown CLO XI Ltd., Series 2018-11A, Class C, VRN, 5.85%, (3-month LIBOR plus 3.25%), 7/14/31(2) | 1,000,000 | 974,198 | |||||
JMP Credit Advisors CLO IIIR Ltd., Series 2014-1RA, Class D, VRN, 5.19%, (3-month LIBOR plus 2.60%), 1/17/28(2) | 1,000,000 | 956,943 | |||||
Madison Park Funding XV Ltd., Series 2014-15A, Class DR, VRN, 8.02%, (3-month LIBOR plus 5.44%), 1/27/26(2) | 1,750,000 | 1,742,501 | |||||
Midocean Credit CLO VII, Series 2017-7A, Class D, VRN, 6.48%, (3-month LIBOR plus 3.88%), 7/15/29(2) | 1,000,000 | 1,001,867 |
15
Principal Amount/Shares | Value | ||||||
Mountain View CLO Ltd., Series 2015-9A, Class CR, VRN, 5.72%, (3-month LIBOR plus 3.12%), 7/15/31(2) | $ | 1,000,000 | $ | 962,730 | |||
Northwoods Capital XVI Ltd., Series 2017-16A, Class D, VRN, 5.83%, (3-month LIBOR plus 3.15%), 11/15/30(2) | 1,000,000 | 971,326 | |||||
OCP CLO Ltd., Series 2015-8A, Class CR, VRN, 5.39%, (3-month LIBOR plus 2.80%), 4/17/27(2) | 1,250,000 | 1,246,875 | |||||
OCP CLO Ltd., Series 2016-12A, Class CR, VRN, 5.60%, (3-month LIBOR plus 3.00%), 10/18/28(2) | 1,000,000 | 958,086 | |||||
Octagon Investment Partners 30 Ltd., Series 2017-1A, Class A1, VRN, 3.91%, (3-month LIBOR plus 1.32%), 3/17/30(2) | 750,000 | 751,164 | |||||
OHA Credit Partners IX Ltd., Series 2013-9A, Class E, VRN, 7.59%, (3-month LIBOR plus 5.00%), 10/20/25(2) | 1,250,000 | 1,249,830 | |||||
TICP CLO I Ltd., Series 2015-1A, Class F, VRN, 9.29%, (3-month LIBOR plus 6.70%), 7/20/27(2) | 500,000 | 440,355 | |||||
TICP CLO I-2 Ltd., Series 2018-IA, Class C, VRN, 5.63%, (3-month LIBOR plus 3.04%), 4/26/28(2) | 1,000,000 | 981,993 | |||||
TICP CLO II-2 Ltd., Series 2018-IIA, Class C, VRN, 5.54%, (3-month LIBOR plus 2.95%), 4/20/28(2) | 1,000,000 | 978,925 | |||||
TICP CLO Ltd., Series 2016-6A, Class D, VRN, 6.80%, (3-month LIBOR plus 4.20%), 1/15/29(2) | 1,000,000 | 1,004,698 | |||||
TICP CLO X Ltd., Series 2018-10A, Class D, VRN, 5.39%, (3-month LIBOR plus 2.80%), 4/20/31(2) | 1,000,000 | 968,805 | |||||
Venture XVI CLO Ltd., Series 2014-16A, Class DRR, VRN, 5.11%, (3-month LIBOR plus 2.51%), 1/15/28(2) | 1,000,000 | 957,052 | |||||
Venture XVIII CLO Ltd., Series 2014-18A, Class DR, VRN, 5.70%, (3-month LIBOR plus 3.10%), 10/15/29(2) | 1,000,000 | 988,568 | |||||
Voya CLO Ltd., Series 2014-1A, Class DR2, VRN, 8.60%, (3-month LIBOR plus 6.00%), 4/18/31(2) | 500,000 | 474,158 | |||||
WhiteHorse VII Ltd., Series 2013-1A, Class B1L, VRN, 6.35%, (3-month LIBOR plus 3.70%), 11/24/25(2) | 1,500,000 | 1,502,204 | |||||
TOTAL COLLATERALIZED LOAN OBLIGATIONS (Cost $37,275,934) | 36,696,351 | ||||||
CORPORATE BONDS — 11.7% | |||||||
Airlines — 0.2% | |||||||
Azul Investments LLP, 5.875%, 10/26/24 | 750,000 | 717,383 | |||||
Auto Components — 0.4% | |||||||
Adient US LLC, 7.00%, 5/15/26(2)(5) | 250,000 | 256,563 | |||||
Cooper-Standard Automotive, Inc., 5.625%, 11/15/26(2)(8) | 1,000,000 | 925,000 | |||||
1,181,563 | |||||||
Beverages — 0.1% | |||||||
Ajecorp BV, 6.50%, 5/14/22(8) | 500,000 | 438,750 | |||||
Capital Markets — 0.4% | |||||||
Deutsche Bank AG, MTN, 4.50%, 5/19/26(8) | EUR | 1,000,000 | 1,175,047 | ||||
Chemicals — 0.8% | |||||||
Nufarm Australia Ltd. / Nufarm Americas, Inc., 5.75%, 4/30/26(2)(8) | $ | 700,000 | 654,500 | ||||
Tronox, Inc., 6.50%, 4/15/26(2) | 700,000 | 708,750 | |||||
Venator Finance S.a.r.l. / Venator Materials LLC, 5.75%, 7/15/25(2)(8) | 1,250,000 | 1,184,375 | |||||
2,547,625 | |||||||
Commercial Services and Supplies — 0.7% | |||||||
Cimpress NV, 7.00%, 6/15/26(2)(8) | 1,000,000 | 992,600 |
16
Principal Amount/Shares | Value | ||||||
LSC Communications, Inc., 8.75%, 10/15/23(2) | $ | 1,000,000 | $ | 1,048,750 | |||
2,041,350 | |||||||
Consumer Finance — 0.4% | |||||||
Quicken Loans, Inc., 5.75%, 5/1/25(2)(8) | 770,000 | 785,400 | |||||
Springleaf Finance Corp., 7.125%, 3/15/26(8) | 500,000 | 537,813 | |||||
1,323,213 | |||||||
Containers and Packaging — 0.3% | |||||||
Intertape Polymer Group, Inc., 7.00%, 10/15/26(2) | 1,000,000 | 1,025,000 | |||||
Diversified Financial Services — 1.0% | |||||||
Compass Group Diversified Holdings LLC, 8.00%, 5/1/26(2) | 300,000 | 317,062 | |||||
Exela Intermediate LLC / Exela Finance, Inc., 10.00%, 7/15/23(2) | 500,000 | 506,090 | |||||
FS Energy & Power Fund, 7.50%, 8/15/23(2) | 600,000 | 621,132 | |||||
Jefferies Finance LLC / JFIN Co-Issuer Corp., 7.25%, 8/15/24(2)(8) | 1,750,000 | 1,736,875 | |||||
3,181,159 | |||||||
Diversified Telecommunication Services — 0.5% | |||||||
Frontier Communications Corp., 8.00%, 4/1/27(2)(8) | 1,500,000 | 1,554,375 | |||||
Equity Real Estate Investment Trusts (REITs) — 0.3% | |||||||
GEO Group, Inc. (The), 5.875%, 1/15/22 | 790,000 | 782,100 | |||||
Food and Staples Retailing — 0.1% | |||||||
Rite Aid Corp., 6.125%, 4/1/23(2)(8) | 500,000 | 427,813 | |||||
Food Products — 0.8% | |||||||
Cooke Omega Investments, Inc. / Alpha VesselCo Holdings, Inc., 8.50%, 12/15/22(2) | 1,000,000 | 990,000 | |||||
MARB BondCo plc, 6.875%, 1/19/25 | 700,000 | 700,087 | |||||
Minerva Luxembourg SA, 5.875%, 1/19/28(8) | 700,000 | 652,806 | |||||
2,342,893 | |||||||
Gas Utilities — 0.7% | |||||||
Genesis Energy LP / Genesis Energy Finance Corp., 6.50%, 10/1/25 | 1,000,000 | 1,007,500 | |||||
Superior Plus LP / Superior General Partner, Inc., 7.00%, 7/15/26(2) | 1,000,000 | 1,030,000 | |||||
2,037,500 | |||||||
Health Care Providers and Services — 0.3% | |||||||
DaVita, Inc., 5.00%, 5/1/25(8) | 1,000,000 | 982,190 | |||||
Household Durables — 0.2% | |||||||
FXI Holdings, Inc., 7.875%, 11/1/24(2) | 700,000 | 662,375 | |||||
Machinery — 0.2% | |||||||
Wabash National Corp., 5.50%, 10/1/25(2)(8) | 469,000 | 447,895 | |||||
Media — 0.6% | |||||||
Altice Luxembourg SA, 7.75%, 5/15/22(2)(8) | 750,000 | 765,937 | |||||
Altice Luxembourg SA, 7.625%, 2/15/25(2)(8) | 250,000 | 234,610 | |||||
Urban One, Inc., 7.375%, 4/15/22(2) | 750,000 | 738,750 | |||||
1,739,297 | |||||||
Metals and Mining — 0.6% | |||||||
First Quantum Minerals Ltd., 6.50%, 3/1/24(2)(8) | 750,000 | 710,625 | |||||
New Gold, Inc., 6.25%, 11/15/22(2) | 600,000 | 547,500 |
17
Principal Amount/Shares | Value | ||||||
Petra Diamonds US Treasury plc, 7.25%, 5/1/22 | $ | 600,000 | $ | 586,500 | |||
1,844,625 | |||||||
Oil, Gas and Consumable Fuels — 0.9% | |||||||
Parkland Fuel Corp., 6.00%, 4/1/26(2) | 600,000 | 613,500 | |||||
Petroleos Mexicanos, 6.50%, 1/23/29 | 1,000,000 | 1,000,950 | |||||
SunCoke Energy Partners LP / SunCoke Energy Partners Finance Corp., 7.50%, 6/15/25(2)(8) | 1,000,000 | 1,012,500 | |||||
2,626,950 | |||||||
Real Estate Management and Development — 0.6% | |||||||
Five Point Operating Co. LP / Five Point Capital Corp., 7.875%, 11/15/25(2) | 400,000 | 400,000 | |||||
Realogy Group LLC / Realogy Co-Issuer Corp., 4.875%, 6/1/23(2)(8) | 600,000 | 575,076 | |||||
Realogy Group LLC / Realogy Co-Issuer Corp., 9.375%, 4/1/27(2) | 833,000 | 867,361 | |||||
1,842,437 | |||||||
Road and Rail — 0.3% | |||||||
XPO CNW, Inc., 6.70%, 5/1/34 | 1,107,000 | 990,765 | |||||
Specialty Retail — 0.3% | |||||||
Guitar Center Escrow Issuer, Inc., 9.50%, 10/15/21(2) | 800,000 | 781,000 | |||||
Thrifts and Mortgage Finance — 0.5% | |||||||
Freedom Mortgage Corp., 10.75%, 4/1/24(2)(8) | 1,000,000 | 980,000 | |||||
Freedom Mortgage Corp., 8.125%, 11/15/24(2) | 600,000 | 535,500 | |||||
1,515,500 | |||||||
Transportation Infrastructure — 0.2% | |||||||
Algeco Global Finance plc, 8.00%, 2/15/23(2) | 600,000 | 616,500 | |||||
Wireless Telecommunication Services — 0.3% | |||||||
Digicel International Finance Ltd. / Digicel Holdings Bermuda Ltd., 8.75%, 5/25/24(2)(8) | 1,000,000 | 1,002,820 | |||||
TOTAL CORPORATE BONDS (Cost $34,883,645) | 35,828,125 | ||||||
COMMERCIAL MORTGAGE-BACKED SECURITIES — 8.8% | |||||||
280 Park Avenue Mortgage Trust, Series 2017-280P, Class F, VRN, 5.30%, (1-month LIBOR plus 2.83%), 9/15/34(2) | 1,000,000 | 1,009,513 | |||||
Ashford Hospitality Trust, Series 2018-ASHF, Class E, VRN, 5.57%, (1-month LIBOR plus 3.10%), 4/15/35(2) | 1,000,000 | 1,010,928 | |||||
BBCMS Trust, Series 2018-CBM, Class D, VRN, 4.86%, (1-month LIBOR plus 2.39%), 7/15/37(2) | 1,000,000 | 1,008,131 | |||||
BHMS, Series 2018-ATLS, Class C, VRN, 4.37%, (1-month LIBOR plus 1.90%), 7/15/35(2) | 1,000,000 | 1,000,871 | |||||
BX Trust, Series 2017-SLCT, Class E, VRN, 5.62%, (1-month LIBOR plus 3.15%), 7/15/34(2) | 1,700,000 | 1,714,739 | |||||
BX Trust, Series 2017-SLCT, Class F, VRN, 6.72%, (1-month LIBOR plus 4.25%), 7/15/34(2) | 850,000 | 856,375 | |||||
BX Trust, Series 2018-BILT, Class E, VRN, 4.89%, (1-month LIBOR plus 2.42%), 5/15/30(2) | 1,000,000 | 1,006,262 | |||||
BX Trust, Series 2018-GW, Class F, VRN, 4.89%, (1-month LIBOR plus 2.42%), 5/15/35(2) | 1,000,000 | 1,007,470 | |||||
BXP Trust, Series 2017-CQHP, Class E, VRN, 5.47%, (1-month LIBOR plus 3.00%), 11/15/34(2) | 1,000,000 | 1,001,971 | |||||
Caesars Palace Las Vegas Trust, Series 2017-VICI, Class E, VRN, 4.50%, 10/15/34(2) | 1,000,000 | 1,013,965 |
18
Principal Amount/Shares | Value | ||||||
CAMB Commercial Mortgage Trust, Series 2019-LIFE, Class A, VRN, 3.54%, (1-month LIBOR plus 1.07%), 12/15/37(2) | $ | 900,000 | $ | 904,157 | |||
CHT Mortgage Trust, Series 2017-CSMO, Class F, VRN, 6.21%, (1-month LIBOR plus 3.74%), 11/15/36(2) | 1,000,000 | 1,007,313 | |||||
GS Mortgage Securities Corp. II, Series 2012-TMSQ, Class D, VRN, 3.57%, 12/10/30(2) | 1,422,000 | 1,398,246 | |||||
GS Mortgage Securities Corp. Trust, Series 2017-500K, Class F, VRN, 4.27%, (1-month LIBOR plus 1.80%), 7/15/32(2) | 1,000,000 | 998,143 | |||||
Hilton Orlando Trust, Series 2018-ORL, Class E, VRN, 5.12%, (1-month LIBOR plus 2.65%), 12/15/34(2) | 1,000,000 | 1,008,925 | |||||
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2018-LAQ, Class E, VRN, 5.47%, (1-month LIBOR plus 3.00%), 6/15/35(2) | 1,493,616 | 1,506,295 | |||||
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2018-PHH, Class D, VRN, 4.18%, (1-month LIBOR plus 1.71%), 6/15/35(2) | 1,000,000 | 1,002,336 | |||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2018-BCON, Class D, VRN, 3.88%, 1/5/31(2) | 1,000,000 | 1,007,659 | |||||
Lone Star Portfolio Trust, Series 2015-LSP, Class E, VRN, 8.32%, (1-month LIBOR plus 5.85%), 9/15/28(2) | 1,279,834 | 1,291,655 | |||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C15, Class D, VRN, 5.08%, 4/15/47(2) | 1,250,000 | 1,290,368 | |||||
Morgan Stanley Capital I Trust, Series 2017-JWDR, Class E, VRN, 5.52%, (1-month LIBOR plus 3.05%), 11/15/34(2) | 2,500,000 | 2,523,381 | |||||
Morgan Stanley Capital I Trust, Series 2018-BOP, Class F, VRN, 4.97%, (1-month LIBOR plus 2.50%), 8/15/33(2) | 1,000,000 | 1,001,759 | |||||
Palisades Center Trust, Series 2016-PLSD, Class D, 4.74%, 4/13/33(2) | 1,575,000 | 1,488,513 | |||||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $26,873,710) | 27,058,975 | ||||||
EXCHANGE-TRADED FUNDS — 3.8% | |||||||
SPDR Bloomberg Barclays Convertible Securities ETF | 92,180 | 4,931,630 | |||||
SPDR Bloomberg Barclays Emerging Markets Local Bond ETF | 110,447 | 2,950,039 | |||||
VanEck Vectors J.P. Morgan EM Local Currency Bond ETF | 116,312 | 3,852,254 | |||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $11,522,190) | 11,733,923 | ||||||
COLLATERALIZED MORTGAGE OBLIGATIONS — 2.7% | |||||||
Private Sponsor Collateralized Mortgage Obligations — 0.9% | |||||||
Bear Stearns Asset Backed Securities I Trust, Series 2004-AC6, Class A2, VRN, 2.88%, (1-month LIBOR plus 0.40%), 11/25/34 | $ | 971,731 | 898,341 | ||||
COLT Mortgage Loan Trust, Series 2019-2, Class A2 SEQ, VRN, 3.44%, 5/25/49(2) | 691,476 | 692,664 | |||||
Sequoia Mortgage Trust, Series 2018-CH4, Class A19, VRN, 4.50%, 10/25/48(2) | 334,432 | 346,550 | |||||
Sequoia Mortgage Trust, Series 2019-CH1, Class A19, VRN, 4.00%, 3/25/49(2) | 759,741 | 779,969 | |||||
2,717,524 | |||||||
U.S. Government Agency Collateralized Mortgage Obligations — 1.8% | |||||||
FNMA, Series 2016-C05, Class 2M2, VRN, 6.93%, (1-month LIBOR plus 4.45%), 1/25/29 | 1,500,000 | 1,632,262 | |||||
FNMA, Series 2016-C06, Class 1M2, VRN, 6.73%, (1-month LIBOR plus 4.25%), 4/25/29 | 1,000,000 | 1,106,718 |
19
Principal Amount/Shares | Value | ||||||
FNMA, Series 2018-C03, Class 1M2, VRN, 4.63%, (1-month LIBOR plus 2.15%), 10/25/30 | $ | 1,000,000 | $ | 1,006,230 | |||
FNMA, Series 2018-C06, Class 1M2, VRN, 4.48%, (1-month LIBOR plus 2.00%), 3/25/31 | 1,000,000 | 1,006,664 | |||||
GNMA, Series 2012-87, IO, VRN, 0.46%, 8/16/52 | 4,724,076 | 104,089 | |||||
GNMA, Series 2012-99, IO, SEQ, VRN, 0.52%, 10/16/49 | 4,020,346 | 111,698 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.73%, 2/16/55 | 4,237,050 | 201,045 | |||||
GNMA, Series 2014-126, IO, SEQ, VRN, 0.94%, 2/16/55 | 5,214,831 | 290,821 | |||||
GNMA, Series 2015-85, IO, VRN, 0.56%, 7/16/57 | 5,946,364 | 241,232 | |||||
5,700,759 | |||||||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $8,842,651) | 8,418,283 | ||||||
PREFERRED STOCKS — 2.7% | |||||||
Equity Real Estate Investment Trusts (REITs) — 2.5% | |||||||
American Homes 4 Rent, 6.50% | 13,744 | 363,529 | |||||
American Homes 4 Rent, 6.35% | 17,248 | 455,347 | |||||
American Homes 4 Rent, 5.875% | 11,400 | 284,430 | |||||
Brookfield Property REIT, Inc., 6.375% | 11,121 | 281,250 | |||||
Cedar Realty Trust, Inc., 6.50% | 14,967 | 334,812 | |||||
Colony Capital, Inc., 7.125% | 5,490 | 111,282 | |||||
Colony Capital, Inc., 7.125% | 13,946 | 281,151 | |||||
Digital Realty Trust, Inc., 6.35% | 13,991 | 362,787 | |||||
Digital Realty Trust, Inc., 6.625% | 8,857 | 236,659 | |||||
Digital Realty Trust, Inc., 5.25% | 9,875 | 243,419 | |||||
Kimco Realty Corp., 5.625% | 8,219 | 204,653 | |||||
Kimco Realty Corp., 5.50% | 10,532 | 258,771 | |||||
Monmouth Real Estate Investment Corp., 6.125% | 18,299 | 443,202 | |||||
Pebblebrook Hotel Trust, 6.50% | 3,936 | 98,990 | |||||
Pebblebrook Hotel Trust, 6.375% | 7,503 | 193,878 | |||||
Pebblebrook Hotel Trust, 6.30% | 17,950 | 452,520 | |||||
PS Business Parks, Inc., 5.25% | 14,744 | 364,177 | |||||
Public Storage, 5.125% | 4,825 | 118,936 | |||||
QTS Realty Trust, Inc., 7.125% | 13,170 | 342,025 | |||||
Rexford Industrial Realty, Inc., 5.875% | 13,901 | 345,440 | |||||
Rexford Industrial Realty, Inc., 5.875% | 9,100 | 227,136 | |||||
SITE Centers Corp., 6.50% | 9,389 | 238,574 | |||||
Summit Hotel Properties, Inc., 6.25% | 11,965 | 284,049 | |||||
Sunstone Hotel Investors, Inc., 6.95% | 11,755 | 312,448 | |||||
VEREIT, Inc., 6.70% | 14,291 | 358,847 | |||||
Vornado Realty Trust, 5.40% | 14,621 | 360,992 | |||||
7,559,304 | |||||||
Mortgage Real Estate Investment Trusts (REITs) — 0.2% | |||||||
Apollo Commercial Real Estate Finance, Inc., 8.00% | 14,200 | 362,810 | |||||
MFA Financial, Inc., 7.50% | 7,555 | 192,048 | |||||
554,858 | |||||||
TOTAL PREFERRED STOCKS (Cost $7,932,908) | 8,114,162 |
20
Principal Amount/Shares | Value | ||||||
EXCHANGE-TRADED NOTES — 2.0% | |||||||
ETRACS Alerian MLP Infrastructure Index ETN | $ | 139,642 | $ | 3,079,106 | |||
JPMorgan Alerian MLP Index ETN | 122,943 | 3,083,411 | |||||
TOTAL EXCHANGE-TRADED NOTES (Cost $6,203,415) | 6,162,517 | ||||||
CONVERTIBLE BONDS† | |||||||
Energy Equipment and Services† | |||||||
CHC Group LLC / CHC Finance Ltd., 0.00%, 10/1/20 (Acquired 3/13/17, Cost $94,558)(6)(7) (Cost $94,558) | 114,377 | 37,172 | |||||
TEMPORARY CASH INVESTMENTS — 11.6% | |||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost $35,707,199) | 35,707,199 | 35,707,199 | |||||
TOTAL INVESTMENT SECURITIES BEFORE SECURITIES SOLD SHORT — 103.1% (Cost $313,193,379) | 316,949,152 | ||||||
CORPORATE BONDS SOLD SHORT — (2.2)% | |||||||
Chemicals — (0.3)% | |||||||
Valvoline, Inc., 5.50%, 7/15/24 | $ | (1,000,000 | ) | (1,030,000 | ) | ||
Consumer Finance — (0.3)% | |||||||
Refinitiv US Holdings, Inc., 144A, 6.25%, 5/15/26 | (1,000,000 | ) | (1,028,750 | ) | |||
Energy Equipment and Services — (0.3)% | |||||||
Precision Drilling Corp., 144A, 7.125%, 1/15/26 | (1,000,000 | ) | (1,010,000 | ) | |||
Food Products — (0.3)% | |||||||
Kraft Heinz Foods Co., 4.625%, 1/30/29 | (800,000 | ) | (829,845 | ) | |||
Media — (0.4)% | |||||||
Meredith Corp., 6.875%, 2/1/26 | (1,000,000 | ) | (1,045,000 | ) | |||
Oil, Gas and Consumable Fuels — (0.3)% | |||||||
SM Energy Co., 6.625%, 1/15/27 | (1,000,000 | ) | (947,500 | ) | |||
Specialty Retail — (0.3)% | |||||||
United Rentals North America, Inc., 6.50%, 12/15/26 | (700,000 | ) | (750,750 | ) | |||
TOTAL CORPORATE BONDS SOLD SHORT (Proceeds $6,584,356) | (6,641,845 | ) | |||||
CONVERTIBLE BONDS SOLD SHORT — (0.2)% | |||||||
Automobiles — (0.2)% | |||||||
Tesla, Inc., 1.25%, 3/1/21 (Proceeds $815,000) | (800,000 | ) | (786,734 | ) | |||
COMMON STOCKS SOLD SHORT — (0.2)% | |||||||
Software — (0.1)% | |||||||
SVMK, Inc. | (17,000 | ) | (304,300 | ) | |||
Specialty Retail — (0.1)% | |||||||
Carvana Co. | (3,500 | ) | (250,460 | ) | |||
TOTAL COMMON STOCKS SOLD SHORT (Proceeds $504,297) | (554,760 | ) | |||||
TOTAL SECURITIES SOLD SHORT (Proceeds $7,903,653) | (7,983,339 | ) | |||||
OTHER ASSETS AND LIABILITIES — (0.5)% | (1,475,113 | ) | |||||
TOTAL NET ASSETS — 100.0% | $ | 307,490,700 |
21
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | ||||||||||
Currency Purchased | Currency Sold | Counterparty | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||
USD | 3,584,058 | EUR | 3,180,500 | State Street Bank and Trust | 5/24/19 | $ | 10,312 |
FUTURES CONTRACTS PURCHASED | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
CBOE Volatility Index (VIX) | 366 | May 2019 | USD | 366,000 | $ | 5,279,550 | $ | (37,391 | ) |
FUTURES CONTRACTS SOLD | |||||||||||
Reference Entity | Contracts | Expiration Date | Notional Amount | Underlying Contract Value | Unrealized Appreciation (Depreciation) | ||||||
90-Day Eurodollar | 6 | December 2019 | USD | 1,500,000 | $ | 1,463,400 | $ | (3,750 | ) | ||
CBOE Volatility Index (VIX) | 349 | June 2019 | USD | 349,000 | 5,505,475 | (105,111 | ) | ||||
Euro-Bund 10-Year Bonds | 49 | June 2019 | EUR | 4,900,000 | 9,085,177 | 55,986 | |||||
Russell 2000 E-Mini Index | 132 | June 2019 | USD | 6,600 | 10,521,720 | (451,653 | ) | ||||
S&P 500 E-Mini Utilities Select Sector Index | 137 | June 2019 | USD | 13,700 | 8,100,810 | (81,480 | ) | ||||
U.S. Treasury 2-Year Notes | 28 | June 2019 | USD | 5,600,000 | 5,964,219 | 12,198 | |||||
$ | 40,640,801 | $ | (573,810 | ) |
22
CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENTS | ||||||||||||||||
Reference Entity | Type | Fixed Rate Received (Paid) | Termination Date | Notional Amount | Premiums Paid (Received) | Unrealized Appreciation (Depreciation) | Value^ | |||||||||
Markit CDX North America High Yield Index Series 31 | Buy | (5.00)% | 12/20/23 | $ | 16,975,000 | $ | (728,194 | ) | $ | (797,457 | ) | $ | (1,525,651 | ) | ||
Markit CDX North America High Yield Index Series 32 | Buy | (5.00)% | 6/20/24 | $ | 4,000,000 | (303,800 | ) | (21,111 | ) | (324,911 | ) | |||||
Markit iTraxx Europe Crossover Index Series 31 | Buy | (5.00)% | 6/20/24 | EUR | 4,000,000 | (525,407 | ) | (26,978 | ) | (552,385 | ) | |||||
Markit iTraxx Europe Index Series 31 | Buy | (1.00)% | 6/20/24 | EUR | 5,300,000 | (97,051 | ) | (44,890 | ) | (141,941 | ) | |||||
$ | (1,654,452 | ) | $ | (890,436 | ) | $ | (2,544,888 | ) |
^ | The value for credit default swap agreements serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability or profit at the period end. Increasing values in absolute terms when compared to the notional amount of the credit default swap agreement represent a deterioration of the referenced entity's credit soundness and an increased likelihood or risk of a credit event occurring as defined in the agreement. |
23
NOTES TO SCHEDULE OF INVESTMENTS | ||
CDX | - | Credit Derivatives Indexes |
EUR | - | Euro |
Euribor | - | Euro Interbank Offered Rate |
FNMA | - | Federal National Mortgage Association |
GNMA | - | Government National Mortgage Association |
IO | - | Interest Only |
LIBOR | - | London Interbank Offered Rate |
MTN | - | Medium Term Note |
PIK | - | Payment in Kind. Security may pay a cash rate and/or an in kind rate. |
SEQ | - | Sequential Payer |
USD | - | United States Dollar |
VRN | - | Variable Rate Note. The rate adjusts periodically based upon the terms set forth in the security’s offering documents. The rate shown is effective at the period end and the reference rate and spread, if any, is indicated. |
† | Category is less than 0.05% of total net assets. |
(1) | Non-income producing. |
(2) | Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration, normally to qualified institutional investors. The aggregate value of these securities at the period end was $136,399,107, which represented 44.4% of total net assets. Of these securities, 0.9% of total net assets were deemed illiquid under policies approved by the Board of Directors. |
(3) | The interest rate on a bank loan obligation adjusts periodically based on a predetermined schedule. Rate shown is effective at period end. The maturity date on a bank loan obligation may be less than indicated as a result of contractual or optional prepayments. These prepayments cannot be predicted with certainty. |
(4) | The interest rate will be determined upon settlement of the bank loan obligation after period end. |
(5) | When-issued security. The issue price and yield are fixed on the date of the commitment, but payment and delivery are scheduled for a future date. |
(6) | Security is a zero-coupon bond. Zero-coupon securities are issued at a substantial discount from their value at maturity. |
(7) | Restricted security that may not be offered for public sale without being registered with the Securities and Exchange Commission and/or may be subject to resale, redemption or transferability restrictions. The aggregate value of these securities at the period end was $37,172, which represented less than 0.05% of total net assets. |
(8) | Security, or a portion thereof, has been pledged at the custodian bank or with a broker for collateral requirements on forward foreign currency exchange contracts, futures contracts, and/or swap agreements. At the period end, the aggregate value of securities pledged was $16,017,414. |
See Notes to Financial Statements.
24
Statement of Assets and Liabilities |
APRIL 30, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $313,193,379) | $ | 316,949,152 | |
Cash | 522,189 | ||
Foreign currency holdings, at value (cost of $159,749) | 160,095 | ||
Deposits with broker for swap agreements | 661,242 | ||
Deposits with broker for futures contracts | 2,565,931 | ||
Receivable for investments sold | 10,660,131 | ||
Receivable for capital shares sold | 679,196 | ||
Receivable for variation margin on futures contracts | 65,990 | ||
Receivable for variation margin on swap agreements | 98,796 | ||
Unrealized appreciation on forward foreign currency exchange contracts | 10,312 | ||
Interest and dividends receivable | 1,383,771 | ||
333,756,805 | |||
Liabilities | |||
Securities sold short, at value (proceeds of $7,903,653) | 7,983,339 | ||
Payable for investments purchased | 16,424,769 | ||
Payable for capital shares redeemed | 1,020,475 | ||
Payable for variation margin on futures contracts | 187,269 | ||
Payable for variation margin on swap agreements | 36,924 | ||
Accrued management fees | 446,526 | ||
Distribution and service fees payable | 15,524 | ||
Interest expense payable on securities sold short | 144,222 | ||
Fees and charges payable on borrowings for securities sold short | 7,057 | ||
26,266,105 | |||
Net Assets | $ | 307,490,700 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 307,079,644 | |
Distributable earnings | 411,056 | ||
$ | 307,490,700 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $57,834,136 | 5,963,924 | $9.70 | |||
I Class, $0.01 Par Value | $212,473,175 | 21,902,788 | $9.70 | |||
Y Class, $0.01 Par Value | $7,750,069 | 798,802 | $9.70 | |||
A Class, $0.01 Par Value | $12,037,479 | 1,241,463 | $9.70* | |||
C Class, $0.01 Par Value | $15,815,162 | 1,639,973 | $9.64 | |||
R Class, $0.01 Par Value | $16,616 | 1,716 | $9.68 | |||
R6 Class, $0.01 Par Value | $1,564,063 | 161,171 | $9.70 |
*Maximum offering price $10.29 (net asset value divided by 0.9425).
See Notes to Financial Statements.
25
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Interest | $ | 6,015,072 | |
Dividends (net of foreign taxes withheld of $30,418) | 1,851,291 | ||
7,866,363 | |||
Expenses: | |||
Management fees | 2,843,766 | ||
Distribution and service fees: | |||
A Class | 15,603 | ||
C Class | 79,779 | ||
R Class | 50 | ||
Directors' fees and expenses | 4,024 | ||
Interest expense on securities sold short | 32,113 | ||
Fees and charges on borrowings for securities sold short | 7,057 | ||
Other expenses | 5,496 | ||
2,987,888 | |||
Fees waived(1) | (164,650 | ) | |
2,823,238 | |||
Net investment income (loss) | 5,043,125 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | (831,574 | ) | |
Securities sold short transactions | 23,974 | ||
Forward foreign currency exchange contract transactions | 106,429 | ||
Futures contract transactions | (2,143,573 | ) | |
Swap agreement transactions | 123,500 | ||
Foreign currency translation transactions | 5,536 | ||
(2,715,708 | ) | ||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 6,070,478 | ||
Securities sold short | (111,719 | ) | |
Forward foreign currency exchange contracts | (14,010 | ) | |
Futures contracts | (1,054,800 | ) | |
Swap agreements | (890,436 | ) | |
Translation of assets and liabilities in foreign currencies | 4,089 | ||
4,003,602 | |||
Net realized and unrealized gain (loss) | 1,287,894 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 6,331,019 |
(1) | Amount consists of $69,478, $75,637, $3,052, $6,865, $8,776, $11 and $831 for Investor Class, I Class, Y Class, A Class, C Class, R Class and R6 Class, respectively. |
See Notes to Financial Statements.
26
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2018 | ||||||
Increase (Decrease) in Net Assets | April 30, 2019 | October 31, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 5,043,125 | $ | 7,871,363 | ||
Net realized gain (loss) | (2,715,708 | ) | 572,418 | |||
Change in net unrealized appreciation (depreciation) | 4,003,602 | (4,891,751 | ) | |||
Net increase (decrease) in net assets resulting from operations | 6,331,019 | 3,552,030 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (2,186,262 | ) | (3,621,683 | ) | ||
I Class | (2,218,709 | ) | (3,697,648 | ) | ||
Y Class | (97,134 | ) | (34,132 | ) | ||
A Class | (195,932 | ) | (309,010 | ) | ||
C Class | (179,422 | ) | (338,648 | ) | ||
R Class | (309 | ) | (207 | ) | ||
R6 Class | (27,009 | ) | (14,478 | ) | ||
Decrease in net assets from distributions | (4,904,777 | ) | (8,015,806 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | 16,762,887 | 16,638,755 | ||||
Net increase (decrease) in net assets | 18,189,129 | 12,174,979 | ||||
Net Assets | ||||||
Beginning of period | 289,301,571 | 277,126,592 | ||||
End of period | $ | 307,490,700 | $ | 289,301,571 |
See Notes to Financial Statements.
27
Notes to Financial Statements |
APRIL 30, 2019 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. AC Alternatives Income Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek to provide diverse sources of income.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class and R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Fixed income securities are valued at the evaluated mean as provided by independent pricing services or at the mean of the most recent bid and asked prices as provided by investment dealers. Corporate bonds, U.S. Treasury and Government Agency securities, convertible bonds and bank loan obligations are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Collateralized loan obligations are valued based on discounted cash flow models that consider trade and economic data, prepayment assumptions and default projections. Fixed income securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Exchange-traded notes and equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Exchange-traded futures contracts are valued at the settlement price as provided by the appropriate exchange. Swap agreements are valued at an evaluated mean as provided by independent pricing services or independent brokers. Forward foreign currency exchange contracts are valued at the mean of the appropriate forward exchange rate at the close of the NYSE as provided by an independent pricing service. Investments initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
28
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Interest income is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes.
Securities Sold Short — The fund enters into short sales, which is selling securities it does not own, as part of its normal investment activities. Upon selling a security short, the fund will segregate cash, cash equivalents or other appropriate liquid securities in at least an amount equal to the current market value of the securities sold short until the fund replaces the borrowed security. Interest earned on segregated cash for securities sold short, if any, is reflected as interest income. The fund is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. The fund may pay fees or charges on the assets borrowed for securities sold short. These fees are calculated daily based upon the value of each security sold short and a rate that is dependent on the availability of such security. If the market price of a security increases after the fund borrows the security, the fund may suffer a loss when it replaces the borrowed security at the higher price. Any loss will be increased by the amount of compensation, interest or dividends, and transaction costs the fund must pay to the lender of the borrowed security. Liabilities for securities sold short are valued daily and changes in value are recorded as change in net unrealized appreciation (depreciation) on securities sold short. The fund records realized gain (loss) on a security sold short when it is terminated by the fund and includes as a component of net realized gain (loss) on securities sold short transactions.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively. Net realized and unrealized foreign currency exchange gains or losses related to securities sold short are a component of net realized gain (loss) on securities sold short transactions and change in net unrealized appreciation (depreciation) on securities sold short, respectively.
29
Segregated Assets — In accordance with the 1940 Act, the fund segregates assets on its books and records to cover certain types of investment securities and other financial instruments. American Century Investment Management, Inc. (ACIM) (the investment advisor) monitors, on a daily basis, the securities segregated to ensure the fund designates a sufficient amount of liquid assets, marked-to-market daily. The fund may also receive assets or be required to pledge assets at the custodian bank or with a broker for collateral requirements.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. ACIM has engaged Perella Weinberg Partners Capital Management LP (PWP) as a subadvisor for the fund. PWP assists the investment advisor in making recommendations with respect to hiring, terminating, or replacing the fund’s underlying subadvisors. The fund’s underlying subadvisors at the period end were ArrowMark Colorado Holdings LLC, Good Hill Partners LP, Marathon Asset Management, LP and Timbercreek Investment Management (U.S.) LLC. Effective December 3, 2018, Marathon Asset Management, LP was added as a subadvisor to the fund. Effective January 15, 2019, BCSF Advisors, LP was removed as a subadvisor to the fund. PWP determines the percentage of the fund’s portfolio allocated to each subadvisor, including PWP, in order to seek to achieve the fund’s investment objective. ACIM is responsible for entering into subadvisory agreements and overseeing the activities of each of the subadvisors including monitoring compliance with fund objectives, strategies and restrictions. ACIM pays all costs associated with retaining the subadvisors of the fund.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, expenses on securities sold short, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. During the period ended April 30, 2019, the investment advisor agreed to waive 0.11% of the fund's management fee. The investment advisor expects this waiver to continue until February 29, 2020 and cannot terminate it prior to such date without the approval of the Board of Directors.
30
The annual management fee and the effective annual management fee after waiver for each class for the period ended April 30, 2019 are as follows:
Annual Management Fee | Effective Annual Management Fee After Waiver | |
Investor Class | 2.00% | 1.89% |
I Class | 1.80% | 1.69% |
Y Class | 1.65% | 1.54% |
A Class | 2.00% | 1.89% |
C Class | 2.00% | 1.89% |
R Class | 2.00% | 1.89% |
R6 Class | 1.65% | 1.54% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended April 30, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Acquired Fund Fees and Expenses — The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2019 totaled $180,501,976, of which $1,000,000 represented U.S. Treasury and Government Agency obligations.
Sales of investment securities and securities sold short, excluding short-term investments, for the period ended April 30, 2019 totaled $179,935,289, of which $5,234,371 represented U.S. Treasury and Government Agency obligations.
31
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2019 | Year ended October 31, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 120,000,000 | 90,000,000 | ||||||||
Sold | 4,906,332 | $ | 47,276,419 | 7,410,245 | $ | 72,554,413 | ||||
Issued in reinvestment of distributions | 230,118 | 2,180,596 | 368,063 | 3,591,393 | ||||||
Redeemed | (12,265,271 | ) | (118,707,872 | ) | (7,607,664 | ) | (74,518,593 | ) | ||
(7,128,821 | ) | (69,250,857 | ) | 170,644 | 1,627,213 | |||||
I Class/Shares Authorized | 110,000,000 | 90,000,000 | ||||||||
Sold | 13,810,322 | 133,604,096 | 7,580,804 | 74,290,441 | ||||||
Issued in reinvestment of distributions | 234,242 | 2,218,676 | 378,902 | 3,697,648 | ||||||
Redeemed | (5,547,318 | ) | (53,304,809 | ) | (6,229,732 | ) | (61,011,365 | ) | ||
8,497,246 | 82,517,963 | 1,729,974 | 16,976,724 | |||||||
Y Class/Shares Authorized | 30,000,000 | 70,000,000 | ||||||||
Sold | 397,575 | 3,840,487 | 408,264 | 3,998,407 | ||||||
Issued in reinvestment of distributions | 10,224 | 97,134 | 3,489 | 34,132 | ||||||
Redeemed | (14,299 | ) | (137,752 | ) | (6,974 | ) | (68,229 | ) | ||
393,500 | 3,799,869 | 404,779 | 3,964,310 | |||||||
A Class/Shares Authorized | 30,000,000 | 25,000,000 | ||||||||
Sold | 431,980 | 4,133,639 | 666,452 | 6,516,756 | ||||||
Issued in reinvestment of distributions | 20,617 | 195,142 | 31,507 | 307,419 | ||||||
Redeemed | (453,788 | ) | (4,337,213 | ) | (834,537 | ) | (8,159,603 | ) | ||
(1,191 | ) | (8,432 | ) | (136,578 | ) | (1,335,428 | ) | |||
C Class/Shares Authorized | 30,000,000 | 25,000,000 | ||||||||
Sold | 140,876 | 1,337,881 | 523,348 | 5,095,186 | ||||||
Issued in reinvestment of distributions | 18,917 | 178,221 | 34,274 | 332,884 | ||||||
Redeemed | (195,750 | ) | (1,875,551 | ) | (800,606 | ) | (7,785,689 | ) | ||
(35,957 | ) | (359,449 | ) | (242,984 | ) | (2,357,619 | ) | |||
R Class/Shares Authorized | 20,000,000 | 10,000,000 | ||||||||
Sold | 3,030 | 29,062 | 1,258 | 12,352 | ||||||
Issued in reinvestment of distributions | 33 | 309 | 21 | 207 | ||||||
Redeemed | (2,158 | ) | (20,932 | ) | (81,253 | ) | (793,862 | ) | ||
905 | 8,439 | (79,974 | ) | (781,303 | ) | |||||
R6 Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 3,673 | 35,610 | 154,428 | 1,515,468 | ||||||
Issued in reinvestment of distributions | 2,849 | 27,009 | 1,479 | 14,478 | ||||||
Redeemed | (758 | ) | (7,265 | ) | (304,706 | ) | (2,985,088 | ) | ||
5,764 | 55,354 | (148,799 | ) | (1,455,142 | ) | |||||
Net increase (decrease) | 1,731,446 | $ | 16,762,887 | 1,697,062 | $ | 16,638,755 |
32
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments.
• Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
• Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions).
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 48,971,615 | $ | 9,980,410 | — | |||
Asset-Backed Securities | — | 46,719,736 | — | |||||
Bank Loan Obligations | — | 41,520,684 | — | |||||
Collateralized Loan Obligations | — | 36,696,351 | — | |||||
Corporate Bonds | — | 35,828,125 | — | |||||
Commercial Mortgage-Backed Securities | — | 27,058,975 | — | |||||
Exchange-Traded Funds | 11,733,923 | — | — | |||||
Collateralized Mortgage Obligations | — | 8,418,283 | — | |||||
Preferred Stocks | 8,114,162 | — | — | |||||
Exchange-Traded Notes | 6,162,517 | — | — | |||||
Convertible Bonds | — | 37,172 | — | |||||
Temporary Cash Investments | 35,707,199 | — | — | |||||
$ | 110,689,416 | $ | 206,259,736 | — | ||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 12,198 | $ | 55,986 | — | |||
Forward Foreign Currency Exchange Contracts | — | 10,312 | — | |||||
$ | 12,198 | $ | 66,298 | — | ||||
Liabilities | ||||||||
Securities Sold Short | ||||||||
Corporate Bonds | — | $ | 6,641,845 | — | ||||
Convertible Bonds Sold Short | — | 786,734 | — | |||||
Common Stocks Sold Short | $ | 554,760 | — | — | ||||
$ | 554,760 | $ | 7,428,579 | |||||
Other Financial Instruments | ||||||||
Futures Contracts | $ | 679,385 | — | — | ||||
Swap Agreements | — | $ | 2,544,888 | — | ||||
$ | 679,385 | $ | 2,544,888 | — |
33
7. Derivative Instruments
Credit Risk — The fund is subject to credit risk in the normal course of pursuing its investment objectives. The value of a bond generally declines as the credit quality of its issuer declines. Credit default swap agreements enable a fund to buy/sell protection against a credit event of a specific issuer or index. A fund may attempt to enhance returns by selling protection or attempt to mitigate credit risk by buying protection. The buyer/seller of credit protection against a security or basket of securities may pay/receive an up-front or periodic payment to compensate for/against potential default events. Changes in value, including the periodic amounts of interest to be paid or received on swap agreements, are recorded as unrealized appreciation (depreciation) on swap agreements. Upon entering into a centrally cleared swap, a fund is required to deposit cash or securities (initial margin) with a financial intermediary in an amount equal to a certain percentage of the notional amount. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the value and is a component of unrealized gains and losses. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains or losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreement transactions and change in net unrealized appreciation (depreciation) on swap agreements, respectively. The risks of entering into swap agreements include the possible lack of liquidity, failure of the counterparty to meet its obligations, and that there may be unfavorable changes in the underlying investments or instruments. The fund's average notional amount held during the period was $18,178,527.
Equity Price Risk — The fund is subject to equity price risk in the normal course of pursuing its investment objectives. A fund may enter into futures contracts based on an equity index in order to manage its exposure to changes in market conditions. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund is required to deposit either cash or securities in an amount equal to a certain percentage of the contract value (initial margin). Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to equity price risk derivative instruments held during the period was $340,250 futures contracts purchased and $225,283 futures contracts sold.
Foreign Currency Risk — The fund is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by a fund may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency. A fund may enter into forward foreign currency exchange contracts to reduce a fund's exposure to foreign currency exchange rate fluctuations or to gain exposure to the fluctuations in the value of foreign currencies. The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on forward foreign currency exchange contract transactions and change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts, respectively. A fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms. The fund's average U.S. dollar exposure to foreign currency risk derivative instruments held during the period was $3,788,743.
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Interest Rate Risk — The fund is subject to interest rate risk in the normal course of pursuing its investment objectives. The value of bonds generally declines as interest rates rise. A fund may enter into futures contracts based on a bond index or a specific underlying security. A fund may purchase futures contracts to gain exposure to increases in market value or sell futures contracts to protect against a decline in market value. Upon entering into a futures contract, a fund will segregate cash, cash equivalents or other appropriate liquid securities on its records in amounts sufficient to meet requirements. Subsequent payments (variation margin) are made or received daily, in cash, by a fund. The variation margin is equal to the daily change in the contract value and is recorded as unrealized gains and losses. A fund recognizes a realized gain or loss when the futures contract is closed or expires. Net realized and unrealized gains or losses occurring during the holding period of futures contracts are a component of net realized gain (loss) on futures contract transactions and change in net unrealized appreciation (depreciation) on futures contracts, respectively. One of the risks of entering into futures contracts is the possibility that the change in value of the contract may not correlate with the changes in value of the underlying securities. The fund's average notional exposure to interest rate risk derivative instruments held during the period was $6,340,738 futures contracts sold.
Value of Derivative Instruments as of April 30, 2019
Asset Derivatives | Liability Derivatives | |||||||
Type of Risk Exposure | Location on Statement of Assets and Liabilities | Value | Location on Statement of Assets and Liabilities | Value | ||||
Credit Risk | Receivable for variation margin on swap agreements* | $ | 98,796 | Payable for variation margin on swap agreements* | $ | 36,924 | ||
Equity Price Risk | Receivable for variation margin on futures contracts* | 52,800 | Payable for variation margin on futures contracts* | 184,200 | ||||
Foreign Currency Risk | Unrealized appreciation on forward foreign currency exchange contracts | 10,312 | Unrealized depreciation on forward foreign currency exchange contracts | — | ||||
Interest Rate Risk | Receivable for variation margin on futures contracts* | 13,190 | Payable for variation margin on futures contracts* | 3,069 | ||||
$ | 175,098 | $ | 224,193 |
* Included in the unrealized appreciation (depreciation) on futures contracts or centrally cleared swap agreements, as applicable, as reported in the Schedule of Investments.
Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended April 30, 2019
Net Realized Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) | |||||||
Type of Risk Exposure | Location on Statement of Operations | Value | Location on Statement of Operations | Value | ||||
Credit Risk | Net realized gain (loss) on swap agreement transactions | $ | 123,500 | Change in net unrealized appreciation (depreciation) on swap agreements | $ | (890,436 | ) | |
Equity Price Risk | Net realized gain (loss) on futures contract transactions | (2,033,833 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | (1,156,392 | ) | ||
Foreign Currency Risk | Net realized gain (loss) on forward foreign currency exchange contract transactions | 106,429 | Change in net unrealized appreciation (depreciation) on forward foreign currency exchange contracts | (14,010 | ) | |||
Interest Rate Risk | Net realized gain (loss) on futures contract transactions | (109,740 | ) | Change in net unrealized appreciation (depreciation) on futures contracts | 101,592 | |||
$ | (1,913,644 | ) | $ | (1,959,246 | ) |
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8. Risk Factors
ACIM utilizes multiple subadvisors to manage the fund’s assets, each employing its own particular investment strategy. Multi-manager strategies can increase the fund's portfolio turnover rate, which could result in higher levels of realized capital gains or losses, higher brokerage commissions and other transaction costs.
The fund’s investments in secured and unsecured participations in bank loan obligations and assignments of such loans may create substantial risk. The market for bank loans may not be highly liquid and the fund may have difficulty selling them. The fund’s bank loan investments typically will result in the fund having a contractual relationship only with the lender, not with the borrower. In connection with purchasing loan participations, the fund generally will have no right to enforce compliance by borrowers with loan terms nor any set off rights, and the fund may not benefit directly from any posted collateral. As a result, the fund may be subject to the credit risk of both the borrower and the lender selling the participation.
The fund may invest in collateralized debt obligations, collateralized loan obligations and other related instruments. Collateralized debt obligations are subject to credit, interest rate, valuation, and prepayment and extension risks. These securities also are subject to risk of default on the underlying asset, particularly during periods of economic downturn.
The fund's investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
Issuers of high-yield securities (also known as “junk bonds”) are more vulnerable to real or perceived economic changes (such as an economic downturn or a prolonged period of rising interest rates), political changes or adverse developments specific to an issuer. These factors may be more likely to cause an issuer of low quality bonds to default on its obligations.
The fund may also be subject to liquidity risk. During periods of market turbulence or unusually low trading activity, in order to meet redemptions it may be necessary for the fund to sell securities at prices that could have an adverse effect on the fund’s share price.
Mortgage-related and other asset-backed securities are subject to additional risks including prepayment and extension risk. Mortgage-backed securities offered by non-governmental issuers are subject to specific risks, such as the failure of private insurers to meet their obligations and unexpectedly high rates of default on the mortgages backing the securities. Other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as risks associated with the nature and servicing of the assets underlying the securities. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk.
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9. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 313,299,426 | |
Gross tax appreciation of investments | $ | 7,159,874 | |
Gross tax depreciation of investments | (3,510,148 | ) | |
Net tax appreciation (depreciation) of investments | 3,649,726 | ||
Gross tax appreciation on securities sold short | 35,911 | ||
Gross tax depreciation on securities sold short | (115,597 | ) | |
Net tax appreciation (depreciation) | $ | 3,570,040 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of October 31, 2018, the fund had accumulated short-term capital losses of $(149,997), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
10. Recently Issued Accounting Standards
In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities” (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the impact that adopting ASU 2017-08 will have on the financial statements.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses(3) | Operating Expenses (before expense waiver)(3) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2019(4) | $9.65 | 0.16 | 0.05 | 0.21 | (0.16) | — | (0.16) | $9.70 | 2.06% | 1.92%(5) | 2.03%(5) | 3.33%(5) | 3.22%(5) | 67% | $57,834 | ||
2018 | $9.80 | 0.29 | (0.14) | 0.15 | (0.30) | —(6) | (0.30) | $9.65 | 1.66% | 1.91% | 2.01% | 2.99% | 2.89% | 83% | $126,369 | ||
2017 | $9.48 | 0.22 | 0.29 | 0.51 | (0.19) | — | (0.19) | $9.80 | 5.45% | 1.94% | 2.02% | 2.33% | 2.25% | 65% | $126,656 | ||
2016 | $9.61 | 0.24 | 0.04 | 0.28 | (0.41) | — | (0.41) | $9.48 | 3.03% | 2.00% | 2.01% | 2.57% | 2.56% | 98% | $41,447 | ||
2015(7) | $10.00 | 0.10 | (0.49) | (0.39) | — | — | — | $9.61 | (3.90)% | 2.00%(5) | 2.00%(5) | 2.55%(5) | 2.55%(5) | 23% | $21,898 | ||
I Class | |||||||||||||||||
2019(4) | $9.66 | 0.17 | 0.03 | 0.20 | (0.16) | — | (0.16) | $9.70 | 2.17% | 1.72%(5) | 1.83%(5) | 3.53%(5) | 3.42%(5) | 67% | $212,473 | ||
2018 | $9.80 | 0.31 | (0.13) | 0.18 | (0.32) | —(6) | (0.32) | $9.66 | 1.87% | 1.71% | 1.81% | 3.19% | 3.09% | 83% | $129,431 | ||
2017 | $9.48 | 0.27 | 0.26 | 0.53 | (0.21) | — | (0.21) | $9.80 | 5.66% | 1.74% | 1.82% | 2.53% | 2.45% | 65% | $114,472 | ||
2016 | $9.61 | 0.26 | 0.05 | 0.31 | (0.44) | — | (0.44) | $9.48 | 3.19% | 1.80% | 1.81% | 2.77% | 2.76% | 98% | $7,111 | ||
2015(7) | $10.00 | 0.11 | (0.50) | (0.39) | — | — | — | $9.61 | (3.80)% | 1.80%(5) | 1.80%(5) | 2.75%(5) | 2.75%(5) | 23% | $5,769 | ||
Y Class | |||||||||||||||||
2019(4) | $9.66 | 0.18 | 0.03 | 0.21 | (0.17) | — | (0.17) | $9.70 | 2.24% | 1.57%(5) | 1.68%(5) | 3.68%(5) | 3.57%(5) | 67% | $7,750 | ||
2018 | $9.81 | 0.33 | (0.15) | 0.18 | (0.33) | —(6) | (0.33) | $9.66 | 1.92% | 1.56% | 1.66% | 3.34% | 3.24% | 83% | $3,914 | ||
2017(8) | $9.69 | 0.15 | 0.10 | 0.25 | (0.13) | — | (0.13) | $9.81 | 2.61% | 1.59%(5) | 1.67%(5) | 2.80%(5) | 2.72%(5) | 65%(9) | $5 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses(3) | Operating Expenses (before expense waiver)(3) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||||
2019(4) | $9.65 | 0.15 | 0.04 | 0.19 | (0.14) | — | (0.14) | $9.70 | 1.94% | 2.17%(5) | 2.28%(5) | 3.08%(5) | 2.97%(5) | 67% | $12,037 | ||
2018 | $9.80 | 0.27 | (0.14) | 0.13 | (0.28) | —(6) | (0.28) | $9.65 | 1.41% | 2.16% | 2.26% | 2.74% | 2.64% | 83% | $11,992 | ||
2017 | $9.48 | 0.18 | 0.31 | 0.49 | (0.17) | — | (0.17) | $9.80 | 5.19% | 2.19% | 2.27% | 2.08% | 2.00% | 65% | $13,515 | ||
2016 | $9.60 | 0.22 | 0.04 | 0.26 | (0.38) | — | (0.38) | $9.48 | 2.80% | 2.25% | 2.26% | 2.32% | 2.31% | 98% | $20,328 | ||
2015(7) | $10.00 | 0.09 | (0.49) | (0.40) | — | — | — | $9.60 | (4.00)% | 2.25%(5) | 2.25%(5) | 2.30%(5) | 2.30%(5) | 23% | $9,673 | ||
C Class | |||||||||||||||||
2019(4) | $9.60 | 0.11 | 0.04 | 0.15 | (0.11) | — | (0.11) | $9.64 | 1.56% | 2.92%(5) | 3.03%(5) | 2.33%(5) | 2.22%(5) | 67% | $15,815 | ||
2018 | $9.75 | 0.19 | (0.14) | 0.05 | (0.20) | —(6) | (0.20) | $9.60 | 0.55% | 2.91% | 3.01% | 1.99% | 1.89% | 83% | $16,086 | ||
2017 | $9.43 | 0.12 | 0.30 | 0.42 | (0.10) | — | (0.10) | $9.75 | 4.42% | 2.94% | 3.02% | 1.33% | 1.25% | 65% | $18,705 | ||
2016 | $9.57 | 0.14 | 0.05 | 0.19 | (0.33) | — | (0.33) | $9.43 | 2.03% | 3.00% | 3.01% | 1.57% | 1.56% | 98% | $12,129 | ||
2015(7) | $10.00 | 0.06 | (0.49) | (0.43) | — | — | — | $9.57 | (4.30)% | 3.00%(5) | 3.00%(5) | 1.55%(5) | 1.55%(5) | 23% | $9,687 | ||
R Class | |||||||||||||||||
2019(4) | $9.63 | 0.14 | 0.04 | 0.18 | (0.13) | — | (0.13) | $9.68 | 1.81% | 2.42%(5) | 2.53%(5) | 2.83%(5) | 2.72%(5) | 67% | $17 | ||
2018 | $9.78 | 0.26 | (0.16) | 0.10 | (0.25) | —(6) | (0.25) | $9.63 | 1.16% | 2.41% | 2.51% | 2.49% | 2.39% | 83% | $8 | ||
2017 | $9.46 | 0.16 | 0.30 | 0.46 | (0.14) | — | (0.14) | $9.78 | 4.93% | 2.44% | 2.52% | 1.83% | 1.75% | 65% | $790 | ||
2016 | $9.59 | 0.19 | 0.04 | 0.23 | (0.36) | — | (0.36) | $9.46 | 2.50% | 2.50% | 2.51% | 2.07% | 2.06% | 98% | $1,956 | ||
2015(7) | $10.00 | 0.08 | (0.49) | (0.41) | — | — | — | $9.59 | (4.10)% | 2.50%(5) | 2.50%(5) | 2.05%(5) | 2.05%(5) | 23% | $1,917 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses(3) | Operating Expenses (before expense waiver)(3) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R6 Class | |||||||||||||||||
2019(4) | $9.66 | 0.18 | 0.03 | 0.21 | (0.17) | — | (0.17) | $9.70 | 2.14% | 1.57%(5) | 1.68%(5) | 3.68%(5) | 3.57%(5) | 67% | $1,564 | ||
2018 | $9.81 | 0.31 | (0.13) | 0.18 | (0.33) | —(6) | (0.33) | $9.66 | 2.02% | 1.56% | 1.66% | 3.34% | 3.24% | 83% | $1,501 | ||
2017 | $9.48 | 0.25 | 0.31 | 0.56 | (0.23) | — | (0.23) | $9.81 | 5.93% | 1.59% | 1.67% | 2.68% | 2.60% | 65% | $2,983 | ||
2016 | $9.62 | 0.27 | 0.04 | 0.31 | (0.45) | — | (0.45) | $9.48 | 3.39% | 1.65% | 1.66% | 2.92% | 2.91% | 98% | $4,157 | ||
2015(7) | $10.00 | 0.12 | (0.50) | (0.38) | — | — | — | $9.62 | (3.80)% | 1.65%(5) | 1.65%(5) | 2.90%(5) | 2.90%(5) | 23% | $1,924 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Ratio of operating expenses to average net assets does not include any fees and expenses of the acquired funds. |
(4) | Six months ended April 30, 2019 (unaudited). |
(5) | Annualized. |
(6) | Per-share amount was less than $0.005. |
(7) | May 29, 2015 (fund inception) through October 31, 2015. |
(8) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
See Notes to Financial Statements.
Approval of Subadvisory Agreement |
The Fund is a multi-manager fund, which means that American Century Investment Management, Inc. (the "Advisor") has retained several subadvisors, each employing its own particular investment strategy, to manage and make investment decisions with respect to the Fund’s assets. The Advisor has engaged Perella Weinberg Partners Capital Management LP (“PWP”) to manage a portion of the Fund and to assist the Advisor with identifying and recommending other underlying subadvisors to manage distinct investment strategies. PWP uses a flexible and opportunistic investment strategy that allocates Fund assets among underlying subadvisors with expertise in a particular investment strategy, and supplements those strategies with its own direct investment management and hedging strategies. PWP also provides tactical allocation of assets among the various underlying subadvisors and a framework for the risk management and investment monitoring of the Fund. The Advisor provides oversight of each of these functions. The Advisor and PWP share responsibility with regards to due diligence assessments of underlying subadvisors and the overall risk management program for the fund.
At its meeting on September 12, 2018, the Fund's Board of Directors approved Marathon Asset Management, L.P. (the "Subadvisor") as an underlying subadvisor for the Fund. In considering the approval of the Subadvisor and the underlying subadvisory agreement between the Advisor and the Subadvisor, referred to herein as the “Subadvisory Agreement,” the Board received detailed information regarding the Subadvisor, as well as those individuals designated to manage the Fund.
The Board received a recommendation from the Advisor and PWP to approve the Subadvisor as an underlying subadvisor for the Fund. The information considered and the discussions held with regard to the Subadvisor included, but were not limited to:
• | the nature, extent, and quality of investment management services to be provided by the Subadvisor to the Fund; |
• | the Subadvisor’s breadth of experience in managing its particular investment strategy and in managing investments generally; |
• | the expected composition and liquidity of the securities to be held in the Subadvisor’s portion of the Fund; |
• | data comparing the performance of the Subadvisor’s proposed investment strategies employed in similar accounts to appropriate benchmarks; and |
• | the compliance policies, procedures, and regulatory experience of the Subadvisor, including management of other 1940 Act registered investment companies, if applicable. |
The independent Directors reviewed the proposed fees for the Subadvisor, noting that the compensation paid to the Subadvisor would be paid by the Advisor out of the Fund’s unified fee. They also noted that the terms of the Subadvisory Agreement were the result of arms’ length negotiations between the Advisor and the Subadvisor. The independent Directors considered all of the information provided by the Advisor, the Subadvisor, and the independent Directors’ independent counsel in connection with the approval, and concluded that they had sufficient information to evaluate the proposed agreement on behalf of the Fund. In connection with their review, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. Based on all of the information considered, the independent Directors concluded that the Subadvisory Agreement was fair and reasonable in light of the services to be provided and should be approved.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92370 1906 |
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Semiannual Report | |
April 30, 2019 | |
Global Real Estate Fund | |
Investor Class (ARYVX) | |
I Class (ARYNX) | |
Y Class (ARYYX) | |
A Class (ARYMX) | |
C Class (ARYTX) | |
R Class (ARYWX) | |
R5 Class (ARYGX) | |
R6 Class (ARYDX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![jthomasrev0514.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/jthomasrev0514.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
Improving Investor Sentiment, Dovish Central Banks Supported Widespread Gains
Stocks struggled early in the period, while bonds rallied. Mounting investor concerns about slowing global economic and earnings growth, U.S.-China trade tensions and rising U.S. interest rates triggered a broad stock market sell-off. Bonds, on the other hand, benefited, as global growth worries fueled demand for perceived safe-haven securities, driving government bond yields lower. Federal Reserve (Fed) policy also influenced the backdrop. Despite signs that growth was slowing, the Fed raised interest rates in December. Investors feared this rate increase and the Fed’s plans for two more rate hikes in 2019 were too aggressive, and risk-off investing remained in favor.
The new year brought a renewed sense of stability to the global financial markets. Investors’ worst-case fears about growth and trade eased, and corporate earnings results were generally better than expected. Equity valuations appeared attractive following the late-2018 stock market sell-off, and risk-on investing resumed. Meanwhile, the Fed changed course, ending its rate-hike campaign amid moderating global growth and inflation. The Fed's policy pivot along with dovish actions from central banks in the U.K., Europe and Japan helped drive yields lower and support the broad global investment landscape.
Overall, stocks shook off their early losses to generate solid gains for the entire six-month period. Similarly, other risk assets, including high-yield bonds, also delivered strong results. Elsewhere, global yields generally declined for the six-month period, which helped government, securitized and corporate bonds, real estate investment trusts, and other interest rate-sensitive securities generate positive returns.
Looking ahead, we expect volatility to remain a formidable factor as investors react to global growth trends, central bank policy and geopolitical developments. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
![image48a01.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/image48a01.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Fund Characteristics |
APRIL 30, 2019 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 4.6% |
Gaming and Leisure Properties, Inc. | 3.6% |
Vonovia SE | 3.6% |
Sun Communities, Inc. | 3.3% |
Americold Realty Trust | 3.2% |
Alexandria Real Estate Equities, Inc. | 3.1% |
Orix JREIT, Inc. | 2.8% |
Segro plc | 2.7% |
HCP, Inc. | 2.6% |
Camden Property Trust | 2.5% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 49.8% |
Foreign Common Stocks | 48.6% |
Total Common Stocks | 98.4% |
Temporary Cash Investments | 1.7% |
Other Assets and Liabilities | (0.1)% |
Investments by Country | % of net assets |
United States | 49.8% |
Japan | 9.5% |
Hong Kong | 8.3% |
China | 4.9% |
Germany | 4.8% |
Australia | 4.4% |
United Kingdom | 4.2% |
Singapore | 2.5% |
Canada | 2.5% |
Other Countries | 7.5% |
Cash and Equivalents* | 1.6% |
*Includes temporary cash investments and other assets and liabilities. |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2018 to April 30, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 11/1/18 | Ending Account Value 4/30/19 | Expenses Paid During Period(1) 11/1/18 - 4/30/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,140.20 | $5.94 | 1.12% |
I Class | $1,000 | $1,141.50 | $4.88 | 0.92% |
Y Class | $1,000 | $1,142.10 | $4.09 | 0.77% |
A Class | $1,000 | $1,138.30 | $7.26 | 1.37% |
C Class | $1,000 | $1,134.90 | $11.22 | 2.12% |
R Class | $1,000 | $1,136.40 | $8.58 | 1.62% |
R5 Class | $1,000 | $1,140.40 | $4.88 | 0.92% |
R6 Class | $1,000 | $1,141.30 | $4.09 | 0.77% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.24 | $5.61 | 1.12% |
I Class | $1,000 | $1,020.23 | $4.61 | 0.92% |
Y Class | $1,000 | $1,020.98 | $3.86 | 0.77% |
A Class | $1,000 | $1,018.00 | $6.85 | 1.37% |
C Class | $1,000 | $1,014.28 | $10.59 | 2.12% |
R Class | $1,000 | $1,016.76 | $8.10 | 1.62% |
R5 Class | $1,000 | $1,020.23 | $4.61 | 0.92% |
R6 Class | $1,000 | $1,020.98 | $3.86 | 0.77% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
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Schedule of Investments |
APRIL 30, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.4% | ||||
Australia — 4.4% | ||||
Charter Hall Group | 129,607 | $ | 896,321 | |
Goodman Group | 158,868 | 1,473,878 | ||
NEXTDC Ltd.(1) | 77,307 | 348,246 | ||
2,718,445 | ||||
Belgium — 1.0% | ||||
Shurgard Self Storage SA(1) | 8,872 | 293,584 | ||
VGP NV | 3,926 | 343,758 | ||
637,342 | ||||
Canada — 2.5% | ||||
Allied Properties Real Estate Investment Trust | 14,579 | 516,147 | ||
Canadian Apartment Properties REIT | 15,821 | 566,023 | ||
Northview Apartment Real Estate Investment Trust | 20,437 | 429,883 | ||
1,512,053 | ||||
China — 4.9% | ||||
CIFI Holdings Group Co. Ltd. | 456,000 | 303,289 | ||
GDS Holdings Ltd. ADR(1) | 23,024 | 900,929 | ||
Longfor Group Holdings Ltd. | 188,000 | 693,767 | ||
Shimao Property Holdings Ltd. | 139,000 | 422,361 | ||
Sunac China Holdings Ltd. | 135,000 | 697,375 | ||
3,017,721 | ||||
France — 1.3% | ||||
Gecina SA | 5,424 | 809,808 | ||
Germany — 4.8% | ||||
ADO Properties SA | 4,043 | 212,218 | ||
Aroundtown SA | 62,427 | 506,078 | ||
Vonovia SE | 44,410 | 2,215,984 | ||
2,934,280 | ||||
Hong Kong — 8.3% | ||||
Hang Lung Properties Ltd. | 188,000 | 441,139 | ||
Link REIT | 128,000 | 1,491,327 | ||
New World Development Co. Ltd. | 485,000 | 800,607 | ||
Sun Hung Kai Properties Ltd. | 60,000 | 1,033,613 | ||
Times China Holdings Ltd. | 304,000 | 550,664 | ||
Wharf Real Estate Investment Co. Ltd. | 106,000 | 810,924 | ||
5,128,274 | ||||
India — 0.2% | ||||
Embassy Office Parks REIT(1) | 28,000 | 128,990 | ||
Indonesia — 0.2% | ||||
Pakuwon Jati Tbk PT | 2,860,700 | 143,531 | ||
Japan — 9.5% | ||||
Advance Residence Investment Corp. | 186 | 519,276 |
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Shares | Value | |||
GLP J-Reit | 673 | $ | 725,075 | |
Japan Hotel REIT Investment Corp. | 1,009 | 822,630 | ||
Mitsui Fudosan Co. Ltd. | 51,800 | 1,197,550 | ||
Orix JREIT, Inc. | 982 | 1,723,724 | ||
Sumitomo Realty & Development Co. Ltd. | 23,900 | 882,541 | ||
5,870,796 | ||||
Mexico — 0.5% | ||||
Corp. Inmobiliaria Vesta SAB de CV | 207,221 | 325,188 | ||
Netherlands — 1.5% | ||||
InterXion Holding NV(1) | 13,077 | 904,798 | ||
Philippines — 1.2% | ||||
Ayala Land, Inc. | 792,500 | 745,227 | ||
Singapore — 2.5% | ||||
CapitaLand Commercial Trust | 214,100 | 305,461 | ||
CapitaLand Ltd. | 293,200 | 761,352 | ||
Mapletree Commercial Trust | 341,400 | 484,434 | ||
1,551,247 | ||||
Spain — 0.6% | ||||
Inmobiliaria Colonial Socimi SA | 36,520 | 393,065 | ||
Sweden — 1.0% | ||||
Fabege AB | 41,812 | 580,445 | ||
United Kingdom — 4.2% | ||||
Safestore Holdings plc | 56,283 | 472,670 | ||
Segro plc | 189,745 | 1,679,020 | ||
UNITE Group plc (The) | 34,292 | 421,277 | ||
2,572,967 | ||||
United States — 49.8% | ||||
Agree Realty Corp. | 14,246 | 932,686 | ||
Alexandria Real Estate Equities, Inc. | 13,497 | 1,921,838 | ||
Americold Realty Trust | 61,495 | 1,968,455 | ||
Boston Properties, Inc. | 9,829 | 1,352,667 | ||
Camden Property Trust | 15,439 | 1,553,935 | ||
CareTrust REIT, Inc. | 16,763 | 406,503 | ||
Equinix, Inc. | 2,906 | 1,321,358 | ||
Equity Residential | 15,069 | 1,151,573 | ||
Essential Properties Realty Trust, Inc. | 20,086 | 415,379 | ||
Extra Space Storage, Inc. | 4,697 | 487,032 | ||
Gaming and Leisure Properties, Inc. | 55,022 | 2,221,788 | ||
HCP, Inc. | 54,289 | 1,616,726 | ||
Hudson Pacific Properties, Inc. | 27,991 | 975,766 | ||
Invitation Homes, Inc. | 60,142 | 1,495,130 | ||
JBG SMITH Properties | 13,550 | 576,553 | ||
Prologis, Inc. | 37,242 | 2,855,344 | ||
Regency Centers Corp. | 18,984 | 1,275,155 | ||
Rexford Industrial Realty, Inc. | 32,921 | 1,247,377 | ||
Ryman Hospitality Properties, Inc. | 10,194 | 811,442 | ||
SBA Communications Corp.(1) | 1,589 | 323,727 |
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Shares | Value | |||
STORE Capital Corp. | 36,066 | $ | 1,201,719 | |
Sun Communities, Inc. | 16,336 | 2,010,635 | ||
UDR, Inc. | 29,604 | 1,330,700 | ||
Welltower, Inc. | 17,138 | 1,277,295 | ||
30,730,783 | ||||
TOTAL COMMON STOCKS (Cost $51,568,595) | 60,704,960 | |||
TEMPORARY CASH INVESTMENTS — 1.7% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 1.00% - 8.75%, 8/31/19 - 8/15/45, valued at $923,711), in a joint trading account at 2.40%, dated 4/30/19, due 5/1/19 (Delivery value $905,153) | 905,093 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 11/15/45, valued at $158,713), at 1.25%, dated 4/30/19, due 5/1/19 (Delivery value $151,005) | 151,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 702 | 702 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,056,795) | 1,056,795 | |||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $52,625,390) | 61,761,755 | |||
OTHER ASSETS AND LIABILITIES — (0.1)% | (78,238 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 61,683,517 |
SECTOR ALLOCATION | ||
(as a % of net assets) | ||
Diversified | 31.9 | % |
Residential | 19.8 | % |
Industrial | 17.2 | % |
Office | 10.8 | % |
Retail | 8.6 | % |
Health Care | 5.4 | % |
Lodging/Resorts | 2.7 | % |
Self Storage | 2.0 | % |
Cash and Equivalents* | 1.6 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
8
Statement of Assets and Liabilities |
APRIL 30, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $52,625,390) | $ | 61,761,755 | |
Foreign currency holdings, at value (cost of $10) | 10 | ||
Receivable for investments sold | 240,338 | ||
Receivable for capital shares sold | 45,293 | ||
Dividends and interest receivable | 138,720 | ||
Other assets | 318 | ||
62,186,434 | |||
Liabilities | |||
Payable for investments purchased | 416,315 | ||
Payable for capital shares redeemed | 33,863 | ||
Accrued management fees | 50,423 | ||
Distribution and service fees payable | 2,316 | ||
502,917 | |||
Net Assets | $ | 61,683,517 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 53,262,303 | |
Distributable earnings | 8,421,214 | ||
$ | 61,683,517 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $27,790,937 | 2,250,708 | $12.35 | |||
I Class, $0.01 Par Value | $18,450,424 | 1,494,513 | $12.35 | |||
Y Class, $0.01 Par Value | $9,411,887 | 762,141 | $12.35 | |||
A Class, $0.01 Par Value | $1,981,754 | 160,502 | $12.35* | |||
C Class, $0.01 Par Value | $2,158,626 | 174,990 | $12.34 | |||
R Class, $0.01 Par Value | $220,808 | 17,872 | $12.35 | |||
R5 Class, $0.01 Par Value | $6,001 | 486 | $12.35 | |||
R6 Class, $0.01 Par Value | $1,663,080 | 134,757 | $12.34 |
*Maximum offering price $13.10 (net asset value divided by 0.9425).
See Notes to Financial Statements.
9
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $34,170) | $ | 840,130 | |
Interest | 4,418 | ||
844,548 | |||
Expenses: | |||
Management fees | 310,066 | ||
Distribution and service fees: | |||
A Class | 2,485 | ||
C Class | 11,307 | ||
R Class | 472 | ||
Directors' fees and expenses | 824 | ||
Other expenses | 2,536 | ||
327,690 | |||
Net investment income (loss) | 516,858 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 1,556,374 | ||
Foreign currency translation transactions | (3,687 | ) | |
1,552,687 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 5,942,514 | ||
Translation of assets and liabilities in foreign currencies | 363 | ||
5,942,877 | |||
Net realized and unrealized gain (loss) | 7,495,564 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 8,012,422 |
See Notes to Financial Statements.
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Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2018 | ||||||
Increase (Decrease) in Net Assets | April 30, 2019 | October 31, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 516,858 | $ | 1,305,030 | ||
Net realized gain (loss) | 1,552,687 | 3,588,062 | ||||
Change in net unrealized appreciation (depreciation) | 5,942,877 | (5,429,135 | ) | |||
Net increase (decrease) in net assets resulting from operations | 8,012,422 | (536,043 | ) | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (1,322,298 | ) | (2,338,576 | ) | ||
I Class | (539,742 | ) | (245,001 | ) | ||
Y Class | (215,983 | ) | (196 | ) | ||
A Class | (68,764 | ) | (87,066 | ) | ||
C Class | (62,400 | ) | (77,272 | ) | ||
R Class | (5,647 | ) | (3,174 | ) | ||
R5 Class | (208 | ) | (190 | ) | ||
R6 Class | (58,775 | ) | (33,507 | ) | ||
Decrease in net assets from distributions | (2,273,817 | ) | (2,784,982 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (12,809,621 | ) | (11,028,014 | ) | ||
Net increase (decrease) in net assets | (7,071,016 | ) | (14,349,039 | ) | ||
Net Assets | ||||||
Beginning of period | 68,754,533 | 83,103,572 | ||||
End of period | $ | 61,683,517 | $ | 68,754,533 |
See Notes to Financial Statements.
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Notes to Financial Statements |
APRIL 30, 2019 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Global Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
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The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
13
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class.
The annual management fee for each class is as follows:
Investor Class | I Class | Y Class | A Class | C Class | R Class | R5 Class | R6 Class |
1.11% | 0.91% | 0.76% | 1.11% | 1.11% | 1.11% | 0.91% | 0.76% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended April 30, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund sales were $1,176 and there were no interfund purchases. The effect of interfund transactions on the Statement of Operations was $(25) in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2019 were $42,842,588 and $57,211,418, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2019 | Year ended October 31, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 231,258 | $ | 2,683,802 | 905,146 | $ | 10,647,692 | ||||
Issued in reinvestment of distributions | 119,326 | 1,310,194 | 198,026 | 2,326,804 | ||||||
Redeemed | (2,035,443 | ) | (24,090,178 | ) | (3,000,049 | ) | (34,915,271 | ) | ||
(1,684,859 | ) | (20,096,182 | ) | (1,896,877 | ) | (21,940,775 | ) | |||
I Class/Shares Authorized | 40,000,000 | 20,000,000 | ||||||||
Sold | 643,816 | 8,006,202 | 1,019,982 | 11,546,605 | ||||||
Issued in reinvestment of distributions | 49,202 | 539,742 | 19,220 | 225,640 | ||||||
Redeemed | (461,044 | ) | (5,208,870 | ) | (350,846 | ) | (4,104,589 | ) | ||
231,974 | 3,337,074 | 688,356 | 7,667,656 | |||||||
Y Class/Shares Authorized | 30,000,000 | 70,000,000 | ||||||||
Sold | 370,323 | 4,364,256 | 390,675 | 4,600,718 | ||||||
Issued in reinvestment of distributions | 19,267 | 211,357 | 17 | 196 | ||||||
Redeemed | (13,045 | ) | (152,465 | ) | (5,547 | ) | (64,296 | ) | ||
376,545 | 4,423,148 | 385,145 | 4,536,618 | |||||||
A Class/Shares Authorized | 20,000,000 | 15,000,000 | ||||||||
Sold | 3,011 | 33,837 | 36,611 | 433,779 | ||||||
Issued in reinvestment of distributions | 5,915 | 65,004 | 7,096 | 83,451 | ||||||
Redeemed | (26,645 | ) | (311,800 | ) | (110,015 | ) | (1,303,969 | ) | ||
(17,719 | ) | (212,959 | ) | (66,308 | ) | (786,739 | ) | |||
C Class/Shares Authorized | 20,000,000 | 10,000,000 | ||||||||
Sold | 4,852 | 58,824 | 6,177 | 71,778 | ||||||
Issued in reinvestment of distributions | 4,924 | 54,217 | 5,756 | 67,809 | ||||||
Redeemed | (45,808 | ) | (543,487 | ) | (108,373 | ) | (1,268,217 | ) | ||
(36,032 | ) | (430,446 | ) | (96,440 | ) | (1,128,630 | ) | |||
R Class/Shares Authorized | 20,000,000 | 10,000,000 | ||||||||
Sold | 4,908 | 57,006 | 13,285 | 156,407 | ||||||
Issued in reinvestment of distributions | 510 | 5,618 | 269 | 3,174 | ||||||
Redeemed | (879 | ) | (10,283 | ) | (10,557 | ) | (124,932 | ) | ||
4,539 | 52,341 | 2,997 | 34,649 | |||||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||
Issued in reinvestment of distributions | 19 | 208 | 17 | 190 | ||||||
R6 Class/Shares Authorized | 25,000,000 | 20,000,000 | ||||||||
Sold | 14,343 | 165,933 | 65,917 | 773,410 | ||||||
Issued in reinvestment of distributions | 5,363 | 58,775 | 2,857 | 33,507 | ||||||
Redeemed | (9,289 | ) | (107,513 | ) | (18,647 | ) | (217,900 | ) | ||
10,417 | 117,195 | 50,127 | 589,017 | |||||||
Net increase (decrease) | (1,115,116 | ) | $ | (12,809,621 | ) | (932,983 | ) | $ | (11,028,014 | ) |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
Australia | — | $ | 2,718,445 | — | ||||
Belgium | — | 637,342 | — | |||||
Canada | — | 1,512,053 | — | |||||
China | $ | 900,929 | 2,116,792 | — | ||||
France | — | 809,808 | — | |||||
Germany | — | 2,934,280 | — | |||||
Hong Kong | — | 5,128,274 | — | |||||
India | — | 128,990 | — | |||||
Indonesia | — | 143,531 | — | |||||
Japan | — | 5,870,796 | — | |||||
Mexico | — | 325,188 | — | |||||
Philippines | — | 745,227 | — | |||||
Singapore | — | 1,551,247 | — | |||||
Spain | — | 393,065 | — | |||||
Sweden | — | 580,445 | — | |||||
United Kingdom | — | 2,572,967 | — | |||||
Other Countries | 31,635,581 | — | — | |||||
Temporary Cash Investments | 702 | 1,056,093 | — | |||||
$ | 32,537,212 | $ | 29,224,543 | — |
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7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 54,665,596 | |
Gross tax appreciation of investments | $ | 7,269,737 | |
Gross tax depreciation of investments | (173,578 | ) | |
Net tax appreciation (depreciation) of investments | $ | 7,096,159 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of October 31, 2018, the fund had accumulated short-term capital losses of $(399,023), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||||
2019(3) | $11.25 | 0.10 | 1.42 | 1.52 | (0.42) | — | (0.42) | $12.35 | 14.02% | 1.12%(4) | 1.12%(4) | 1.66%(4) | 1.66%(4) | 70% | $27,791 | ||
2018 | $11.80 | 0.20 | (0.35) | (0.15) | (0.40) | — | (0.40) | $11.25 | (1.39)% | 1.11% | 1.18% | 1.67% | 1.60% | 169% | $44,274 | ||
2017 | $11.45 | 0.25 | 0.58 | 0.83 | (0.48) | — | (0.48) | $11.80 | 7.71% | 1.13% | 1.21% | 2.22% | 2.14% | 201% | $68,825 | ||
2016 | $11.62 | 0.15 | 0.01 | 0.16 | (0.33) | — | (0.33) | $11.45 | 1.50% | 1.16% | 1.21% | 1.31% | 1.26% | 250% | $67,798 | ||
2015 | $12.03 | 0.17 | 0.02 | 0.19 | (0.45) | (0.15) | (0.60) | $11.62 | 1.70% | 1.20% | 1.21% | 1.39% | 1.38% | 248% | $72,769 | ||
2014 | $11.54 | 0.13 | 0.88 | 1.01 | (0.37) | (0.15) | (0.52) | $12.03 | 9.29% | 1.20% | 1.20% | 1.15% | 1.15% | 275% | $69,207 | ||
I Class | |||||||||||||||||
2019(3) | $11.26 | 0.10 | 1.44 | 1.54 | (0.45) | — | (0.45) | $12.35 | 14.15% | 0.92%(4) | 0.92%(4) | 1.86%(4) | 1.86%(4) | 70% | $18,450 | ||
2018 | $11.81 | 0.21 | (0.33) | (0.12) | (0.43) | — | (0.43) | $11.26 | (1.18)% | 0.91% | 0.98% | 1.87% | 1.80% | 169% | $14,216 | ||
2017 | $11.47 | 0.25 | 0.59 | 0.84 | (0.50) | — | (0.50) | $11.81 | 7.83% | 0.93% | 1.01% | 2.42% | 2.34% | 201% | $6,782 | ||
2016 | $11.63 | 0.18 | 0.02 | 0.20 | (0.36) | — | (0.36) | $11.47 | 1.79% | 0.96% | 1.01% | 1.51% | 1.46% | 250% | $2,826 | ||
2015 | $12.05 | 0.19 | 0.02 | 0.21 | (0.48) | (0.15) | (0.63) | $11.63 | 1.83% | 1.00% | 1.01% | 1.59% | 1.58% | 248% | $4,325 | ||
2014 | $11.56 | 0.15 | 0.88 | 1.03 | (0.39) | (0.15) | (0.54) | $12.05 | 9.50% | 1.00% | 1.00% | 1.35% | 1.35% | 275% | $8,848 | ||
Y Class | |||||||||||||||||
2019(3) | $11.27 | 0.12 | 1.42 | 1.54 | (0.46) | — | (0.46) | $12.35 | 14.21% | 0.77%(4) | 0.77%(4) | 2.01%(4) | 2.01%(4) | 70% | $9,412 | ||
2018 | $11.81 | 0.21 | (0.32) | (0.11) | (0.43) | — | (0.43) | $11.27 | (1.04)% | 0.76% | 0.83% | 2.02% | 1.95% | 169% | $4,346 | ||
2017(5) | $11.09 | 0.13 | 0.59 | 0.72 | — | — | — | $11.81 | 6.49% | 0.78%(4) | 0.86%(4) | 1.99%(4) | 1.91%(4) | 201%(6) | $5 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||||
2019(3) | $11.24 | 0.08 | 1.43 | 1.51 | (0.40) | — | (0.40) | $12.35 | 13.83% | 1.37%(4) | 1.37%(4) | 1.41%(4) | 1.41%(4) | 70% | $1,982 | ||
2018 | $11.79 | 0.17 | (0.35) | (0.18) | (0.37) | — | (0.37) | $11.24 | (1.64)% | 1.36% | 1.43% | 1.42% | 1.35% | 169% | $2,002 | ||
2017 | $11.44 | 0.24 | 0.56 | 0.80 | (0.45) | — | (0.45) | $11.79 | 7.44% | 1.38% | 1.46% | 1.97% | 1.89% | 201% | $2,882 | ||
2016 | $11.60 | 0.12 | 0.03 | 0.15 | (0.31) | — | (0.31) | $11.44 | 1.33% | 1.41% | 1.46% | 1.06% | 1.01% | 250% | $16,651 | ||
2015 | $12.02 | 0.13 | 0.02 | 0.15 | (0.42) | (0.15) | (0.57) | $11.60 | 1.35% | 1.45% | 1.46% | 1.14% | 1.13% | 248% | $21,275 | ||
2014 | $11.53 | 0.11 | 0.87 | 0.98 | (0.34) | (0.15) | (0.49) | $12.02 | 9.02% | 1.45% | 1.45% | 0.90% | 0.90% | 275% | $16,601 | ||
C Class | |||||||||||||||||
2019(3) | $11.18 | 0.04 | 1.43 | 1.47 | (0.31) | — | (0.31) | $12.34 | 13.49% | 2.12%(4) | 2.12%(4) | 0.66%(4) | 0.66%(4) | 70% | $2,159 | ||
2018 | $11.73 | 0.08 | (0.35) | (0.27) | (0.28) | — | (0.28) | $11.18 | (2.42)% | 2.11% | 2.18% | 0.67% | 0.60% | 169% | $2,360 | ||
2017 | $11.38 | 0.14 | 0.58 | 0.72 | (0.37) | — | (0.37) | $11.73 | 6.65% | 2.13% | 2.21% | 1.22% | 1.14% | 201% | $3,606 | ||
2016 | $11.55 | 0.03 | 0.02 | 0.05 | (0.22) | — | (0.22) | $11.38 | 0.47% | 2.16% | 2.21% | 0.31% | 0.26% | 250% | $7,282 | ||
2015 | $11.96 | 0.05 | 0.02 | 0.07 | (0.33) | (0.15) | (0.48) | $11.55 | 0.73% | 2.20% | 2.21% | 0.39% | 0.38% | 248% | $7,197 | ||
2014 | $11.47 | 0.02 | 0.88 | 0.90 | (0.26) | (0.15) | (0.41) | $11.96 | 8.12% | 2.20% | 2.20% | 0.15% | 0.15% | 275% | $5,428 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||||
2019(3) | $11.23 | 0.07 | 1.42 | 1.49 | (0.37) | — | (0.37) | $12.35 | 13.64% | 1.62%(4) | 1.62%(4) | 1.16%(4) | 1.16%(4) | 70% | $221 | ||
2018 | $11.78 | 0.14 | (0.35) | (0.21) | (0.34) | — | (0.34) | $11.23 | (1.90)% | 1.61% | 1.68% | 1.17% | 1.10% | 169% | $150 | ||
2017 | $11.43 | 0.18 | 0.60 | 0.78 | (0.43) | — | (0.43) | $11.78 | 7.17% | 1.63% | 1.71% | 1.72% | 1.64% | 201% | $122 | ||
2016 | $11.59 | 0.10 | 0.02 | 0.12 | (0.28) | — | (0.28) | $11.43 | 1.07% | 1.66% | 1.71% | 0.81% | 0.76% | 250% | $106 | ||
2015 | $12.01 | 0.11 | 0.01 | 0.12 | (0.39) | (0.15) | (0.54) | $11.59 | 1.08% | 1.70% | 1.71% | 0.89% | 0.88% | 248% | $245 | ||
2014 | $11.52 | 0.08 | 0.87 | 0.95 | (0.31) | (0.15) | (0.46) | $12.01 | 8.74% | 1.70% | 1.70% | 0.65% | 0.65% | 275% | $382 | ||
R5 Class | |||||||||||||||||
2019(3) | $11.27 | 0.11 | 1.42 | 1.53 | (0.45) | — | (0.45) | $12.35 | 14.04% | 0.92%(4) | 0.92%(4) | 1.86%(4) | 1.86%(4) | 70% | $6 | ||
2018 | $11.81 | 0.22 | (0.34) | (0.12) | (0.42) | — | (0.42) | $11.27 | (1.15)% | 0.91% | 0.98% | 1.87% | 1.80% | 169% | $5 | ||
2017(5) | $11.10 | 0.12 | 0.59 | 0.71 | — | — | — | $11.81 | 6.40% | 0.93%(4) | 1.01%(4) | 1.84%(4) | 1.76%(4) | 201%(6) | $5 | ||
R6 Class | |||||||||||||||||
2019(3) | $11.27 | 0.12 | 1.41 | 1.53 | (0.46) | — | (0.46) | $12.34 | 14.13% | 0.77%(4) | 0.77%(4) | 2.01%(4) | 2.01%(4) | 70% | $1,663 | ||
2018 | $11.82 | 0.23 | (0.33) | (0.10) | (0.45) | — | (0.45) | $11.27 | (1.02)% | 0.76% | 0.83% | 2.02% | 1.95% | 169% | $1,401 | ||
2017 | $11.47 | 0.31 | 0.56 | 0.87 | (0.52) | — | (0.52) | $11.82 | 8.09% | 0.78% | 0.86% | 2.57% | 2.49% | 201% | $877 | ||
2016 | $11.64 | 0.19 | 0.01 | 0.20 | (0.37) | — | (0.37) | $11.47 | 1.86% | 0.81% | 0.86% | 1.66% | 1.61% | 250% | $7,938 | ||
2015 | $12.06 | 0.18 | 0.04 | 0.22 | (0.49) | (0.15) | (0.64) | $11.64 | 1.99% | 0.85% | 0.86% | 1.74% | 1.73% | 248% | $7,145 | ||
2014 | $11.57 | 0.17 | 0.88 | 1.05 | (0.41) | (0.15) | (0.56) | $12.06 | 9.67% | 0.85% | 0.85% | 1.50% | 1.50% | 275% | $28 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2019 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
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American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92368 1906 |
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Semiannual Report | |
April 30, 2019 | |
NT Global Real Estate Fund | |
Investor Class (ANREX) | |
G Class (ANRHX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
Fund Characteristics |
APRIL 30, 2019 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 4.6% |
Gaming and Leisure Properties, Inc. | 3.6% |
Vonovia SE | 3.6% |
Sun Communities, Inc. | 3.3% |
Americold Realty Trust | 3.2% |
Alexandria Real Estate Equities, Inc. | 3.1% |
Orix JREIT, Inc. | 2.8% |
Segro plc | 2.7% |
HCP, Inc. | 2.6% |
Camden Property Trust | 2.5% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 49.8% |
Foreign Common Stocks | 48.5% |
Total Common Stocks | 98.3% |
Temporary Cash Investments | 2.0% |
Other Assets and Liabilities | (0.3)% |
Investments by Country | % of net assets |
United States | 49.8% |
Japan | 9.5% |
Hong Kong | 8.3% |
China | 4.9% |
Germany | 4.8% |
Australia | 4.4% |
United Kingdom | 4.2% |
Singapore | 2.5% |
Canada | 2.4% |
Other Countries | 7.5% |
Cash and Equivalents* | 1.7% |
*Includes temporary cash investments and other assets and liabilities. |
2
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2018 to April 30, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 11/1/18 | Ending Account Value 4/30/19 | Expenses Paid During Period(1) 11/1/18 - 4/30/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,139.40 | $5.94 | 1.12% |
G Class | $1,000 | $1,145.60 | $0.05 | 0.01% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.24 | $5.61 | 1.12% |
G Class | $1,000 | $1,024.74 | $0.05 | 0.01% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
3
Schedule of Investments |
APRIL 30, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.3% | ||||
Australia — 4.4% | ||||
Charter Hall Group | 779,330 | $ | 5,389,601 | |
Goodman Group | 955,379 | 8,863,410 | ||
NEXTDC Ltd.(1) | 464,921 | 2,094,338 | ||
16,347,349 | ||||
Belgium — 1.1% | ||||
Shurgard Self Storage SA(1) | 54,387 | 1,799,725 | ||
VGP NV | 24,026 | 2,103,700 | ||
3,903,425 | ||||
Canada — 2.4% | ||||
Allied Properties Real Estate Investment Trust | 87,823 | 3,109,237 | ||
Canadian Apartment Properties REIT | 95,305 | 3,409,695 | ||
Northview Apartment Real Estate Investment Trust | 123,112 | 2,589,607 | ||
9,108,539 | ||||
China — 4.9% | ||||
CIFI Holdings Group Co. Ltd. | 2,756,000 | 1,833,037 | ||
GDS Holdings Ltd. ADR(1) | 138,504 | 5,419,662 | ||
Longfor Group Holdings Ltd. | 1,136,000 | 4,192,124 | ||
Shimao Property Holdings Ltd. | 840,000 | 2,552,396 | ||
Sunac China Holdings Ltd. | 813,000 | 4,199,749 | ||
18,196,968 | ||||
France — 1.3% | ||||
Gecina SA | 32,594 | 4,866,312 | ||
Germany — 4.8% | ||||
ADO Properties SA | 24,827 | 1,303,173 | ||
Aroundtown SA | 377,678 | 3,061,727 | ||
Vonovia SE | 267,154 | 13,330,537 | ||
17,695,437 | ||||
Hong Kong — 8.3% | ||||
Hang Lung Properties Ltd. | 1,143,000 | 2,682,031 | ||
Link REIT | 771,000 | 8,982,916 | ||
New World Development Co. Ltd. | 2,920,000 | 4,820,148 | ||
Sun Hung Kai Properties Ltd. | 361,500 | 6,227,521 | ||
Times China Holdings Ltd. | 1,841,000 | 3,334,775 | ||
Wharf Real Estate Investment Co. Ltd. | 642,000 | 4,911,449 | ||
30,958,840 | ||||
India — 0.2% | ||||
Embassy Office Parks REIT(1) | 168,400 | 775,785 | ||
Indonesia — 0.2% | ||||
Pakuwon Jati Tbk PT | 17,677,600 | 886,947 | ||
Japan — 9.5% | ||||
Advance Residence Investment Corp. | 1,113 | 3,107,278 |
4
Shares | Value | |||
GLP J-Reit | 4,049 | $ | 4,362,301 | |
Japan Hotel REIT Investment Corp. | 6,113 | 4,983,885 | ||
Mitsui Fudosan Co. Ltd. | 311,700 | 7,206,104 | ||
Orix JREIT, Inc. | 5,907 | 10,368,672 | ||
Sumitomo Realty & Development Co. Ltd. | 143,800 | 5,310,018 | ||
35,338,258 | ||||
Mexico — 0.5% | ||||
Corp. Inmobiliaria Vesta SAB de CV | 1,241,522 | 1,948,294 | ||
Netherlands — 1.5% | ||||
InterXion Holding NV(1) | 79,220 | 5,481,232 | ||
Philippines — 1.2% | ||||
Ayala Land, Inc. | 4,771,700 | 4,487,064 | ||
Singapore — 2.5% | ||||
CapitaLand Commercial Trust | 1,288,000 | 1,837,619 | ||
CapitaLand Ltd. | 1,776,300 | 4,612,513 | ||
Mapletree Commercial Trust | 2,053,800 | 2,914,267 | ||
9,364,399 | ||||
Spain — 0.6% | ||||
Inmobiliaria Colonial Socimi SA | 219,691 | 2,364,533 | ||
Sweden — 0.9% | ||||
Fabege AB | 252,569 | 3,506,230 | ||
United Kingdom — 4.2% | ||||
Safestore Holdings plc | 338,577 | 2,843,402 | ||
Segro plc | 1,145,601 | 10,137,221 | ||
UNITE Group plc (The) | 206,288 | 2,534,245 | ||
15,514,868 | ||||
United States — 49.8% | ||||
Agree Realty Corp. | 86,265 | 5,647,770 | ||
Alexandria Real Estate Equities, Inc. | 81,611 | 11,620,590 | ||
Americold Realty Trust | 371,837 | 11,902,502 | ||
Boston Properties, Inc. | 59,432 | 8,179,032 | ||
Camden Property Trust | 93,354 | 9,396,080 | ||
CareTrust REIT, Inc. | 100,925 | 2,447,431 | ||
Equinix, Inc. | 17,572 | 7,989,988 | ||
Equity Residential | 90,627 | 6,925,715 | ||
Essential Properties Realty Trust, Inc. | 122,198 | 2,527,055 | ||
Extra Space Storage, Inc. | 28,655 | 2,971,237 | ||
Gaming and Leisure Properties, Inc. | 332,698 | 13,434,345 | ||
HCP, Inc. | 328,265 | 9,775,732 | ||
Hudson Pacific Properties, Inc. | 169,070 | 5,893,780 | ||
Invitation Homes, Inc. | 363,656 | 9,040,488 | ||
JBG SMITH Properties | 81,580 | 3,471,229 | ||
Prologis, Inc. | 225,189 | 17,265,241 | ||
Regency Centers Corp. | 114,627 | 7,699,496 | ||
Rexford Industrial Realty, Inc. | 198,120 | 7,506,767 | ||
Ryman Hospitality Properties, Inc. | 61,755 | 4,915,698 | ||
SBA Communications Corp.(1) | 9,609 | 1,957,642 |
5
Shares | Value | |||
STORE Capital Corp. | 217,860 | $ | 7,259,095 | |
Sun Communities, Inc. | 98,778 | 12,157,596 | ||
UDR, Inc. | 179,661 | 8,075,762 | ||
Welltower, Inc. | 103,136 | 7,686,726 | ||
185,746,997 | ||||
TOTAL COMMON STOCKS (Cost $312,152,812) | 366,491,477 | |||
TEMPORARY CASH INVESTMENTS — 2.0% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 1.00% - 8.75%, 8/31/19 - 8/15/45, valued at $6,471,903), in a joint trading account at 2.40%, dated 4/30/19, due 5/1/19 (Delivery value $6,341,884) | 6,341,461 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 11/15/45, valued at $1,080,274), at 1.25%, dated 4/30/19, due 5/1/19 (Delivery value $1,058,037) | 1,058,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,956 | 3,956 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $7,403,417) | 7,403,417 | |||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $319,556,229) | 373,894,894 | |||
OTHER ASSETS AND LIABILITIES — (0.3)% | (967,850 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 372,927,044 |
SECTOR ALLOCATION | ||
(as a % of net assets) | ||
Diversified | 31.7 | % |
Residential | 19.9 | % |
Industrial | 17.2 | % |
Office | 10.7 | % |
Retail | 8.6 | % |
Health Care | 5.4 | % |
Lodging/Resorts | 2.7 | % |
Self Storage | 2.1 | % |
Cash and Equivalents* | 1.7 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
6
Statement of Assets and Liabilities |
APRIL 30, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $319,556,229) | $ | 373,894,894 | |
Cash | 465 | ||
Foreign currency holdings, at value (cost of $9) | 9 | ||
Receivable for investments sold | 1,458,342 | ||
Dividends and interest receivable | 860,896 | ||
376,214,606 | |||
Liabilities | |||
Payable for investments purchased | 3,194,940 | ||
Accrued management fees | 92,622 | ||
3,287,562 | |||
Net Assets | $ | 372,927,044 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 353,702,662 | |
Distributable earnings | 19,224,382 | ||
$ | 372,927,044 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $101,759,448 | 9,922,640 | $10.26 | |||
G Class, $0.01 Par Value | $271,167,596 | 26,347,085 | $10.29 |
See Notes to Financial Statements.
7
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $205,941) | $ | 5,030,773 | |
Interest | 31,496 | ||
5,062,269 | |||
Expenses: | |||
Management fees | 1,564,689 | ||
Directors' fees and expenses | 4,977 | ||
Other expenses | 7,073 | ||
1,576,739 | |||
Fees waived - G Class | (1,007,362 | ) | |
569,377 | |||
Net investment income (loss) | 4,492,892 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 7,099,716 | ||
Foreign currency translation transactions | (16,208 | ) | |
7,083,508 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 39,212,937 | ||
Translation of assets and liabilities in foreign currencies | 1,879 | ||
39,214,816 | |||
Net realized and unrealized gain (loss) | 46,298,324 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 50,791,216 |
See Notes to Financial Statements.
8
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2018 | ||||||
Increase (Decrease) in Net Assets | April 30, 2019 | October 31, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 4,492,892 | $ | 10,380,712 | ||
Net realized gain (loss) | 7,083,508 | 10,989,617 | ||||
Change in net unrealized appreciation (depreciation) | 39,214,816 | (22,987,511 | ) | |||
Net increase (decrease) in net assets resulting from operations | 50,791,216 | (1,617,182 | ) | |||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (3,245,373 | ) | (3,692,279 | ) | ||
G Class | (11,698,497 | ) | (12,293,326 | ) | ||
Decrease in net assets from distributions | (14,943,870 | ) | (15,985,605 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (55,181,463 | ) | (25,676,420 | ) | ||
Net increase (decrease) in net assets | (19,334,117 | ) | (43,279,207 | ) | ||
Net Assets | ||||||
Beginning of period | 392,261,161 | 435,540,368 | ||||
End of period | $ | 372,927,044 | $ | 392,261,161 |
See Notes to Financial Statements.
9
Notes to Financial Statements |
APRIL 30, 2019 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Global Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard or the Bloomberg Industry Classification Standard for the tobacco industry. The fund offers the Investor Class and G Class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
10
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
11
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services, which may be provided indirectly through another American Century Investments mutual fund. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The investment advisor agreed to waive the G Class’s management fee in its entirety. The investment advisor expects this waiver to remain in effect permanently and cannot terminate it without the approval of the Board of Directors.
The annual management fee for each class is as follows:
Investor Class | G Class |
1.11% | 0.00%(1) |
(1) | Annual management fee before waiver was 0.76%. |
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $168,477 and $60,619, respectively. The effect of interfund transactions on the Statement of Operations was $(853) in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2019 were $274,735,548 and $338,483,557, respectively.
12
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2019 | Year ended October 31, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 90,000,000 | 90,000,000 | ||||||||
Sold | 174,356 | $ | 1,535,358 | 609,405 | $ | 5,985,751 | ||||
Issued in reinvestment of distributions | 355,852 | 3,245,373 | 379,084 | 3,692,279 | ||||||
Redeemed | (2,381,700 | ) | (23,300,467 | ) | (317,988 | ) | (3,153,870 | ) | ||
(1,851,492 | ) | (18,519,736 | ) | 670,501 | 6,524,160 | |||||
G Class/Shares Authorized | 210,000,000 | 230,000,000 | ||||||||
Sold | 699,658 | 6,741,020 | 1,245,433 | 12,202,353 | ||||||
Issued in reinvestment of distributions | 1,282,730 | 11,698,497 | 1,262,148 | 12,293,326 | ||||||
Redeemed | (5,656,047 | ) | (55,101,244 | ) | (5,750,226 | ) | (56,696,259 | ) | ||
(3,673,659 | ) | (36,661,727 | ) | (3,242,645 | ) | (32,200,580 | ) | |||
Net increase (decrease) | (5,525,151 | ) | $ | (55,181,463 | ) | (2,572,144 | ) | $ | (25,676,420 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
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The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | ||||||||
Australia | — | $ | 16,347,349 | — | ||||
Belgium | — | 3,903,425 | — | |||||
Canada | — | 9,108,539 | — | |||||
China | $ | 5,419,662 | 12,777,306 | — | ||||
France | — | 4,866,312 | — | |||||
Germany | — | 17,695,437 | — | |||||
Hong Kong | — | 30,958,840 | — | |||||
India | — | 775,785 | — | |||||
Indonesia | — | 886,947 | — | |||||
Japan | — | 35,338,258 | — | |||||
Mexico | — | 1,948,294 | — | |||||
Philippines | — | 4,487,064 | — | |||||
Singapore | — | 9,364,399 | — | |||||
Spain | — | 2,364,533 | — | |||||
Sweden | — | 3,506,230 | — | |||||
United Kingdom | — | 15,514,868 | — | |||||
Other Countries | 191,228,229 | — | — | |||||
Temporary Cash Investments | 3,956 | 7,399,461 | — | |||||
$ | 196,651,847 | $ | 177,243,047 | — |
7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
There are certain risks involved in investing in foreign securities. These risks include those resulting from political events (such as civil unrest, national elections and imposition of exchange controls), social and economic events (such as labor strikes and rising inflation), and natural disasters. Securities of foreign issuers may be less liquid and more volatile. Investing in emerging markets or a significant portion of assets in one country or region may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
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As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 330,753,445 | |
Gross tax appreciation of investments | $ | 44,065,610 | |
Gross tax depreciation of investments | (924,161 | ) | |
Net tax appreciation (depreciation) of investments | $ | 43,141,449 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the realization to ordinary income for tax purposes of unrealized gains on investments in passive foreign investment companies.
As of October 31, 2018, the fund had accumulated short-term capital losses of $(32,245,297), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers may be carried forward for an unlimited period. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations.
15
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $9.32 | 0.08 | 1.19 | 1.27 | (0.33) | $10.26 | 13.94% | 1.12%(4) | 1.12%(4) | 1.65%(4) | 1.65%(4) | 75% | $101,759 | ||
2018 | $9.79 | 0.16 | (0.30) | (0.14) | (0.33) | $9.32 | (1.45)% | 1.11% | 1.18% | 1.66% | 1.59% | 178% | $109,781 | ||
2017 | $9.49 | 0.20 | 0.48 | 0.68 | (0.38) | $9.79 | 7.55% | 1.13% | 1.21% | 2.09% | 2.01% | 211% | $108,683 | ||
2016 | $9.57 | 0.13 | 0.01 | 0.14 | (0.22) | $9.49 | 1.58% | 1.16% | 1.21% | 1.30% | 1.25% | 264% | $102,125 | ||
2015(5) | $10.00 | 0.09 | (0.52) | (0.43) | — | $9.57 | (4.30)% | 1.19%(4) | 1.20%(4) | 1.50%(4) | 1.49%(4) | 151% | $92,086 | ||
G Class | |||||||||||||||
2019(3) | $9.41 | 0.13 | 1.18 | 1.31 | (0.43) | $10.29 | 14.56% | 0.01%(4) | 0.77%(4) | 2.76%(4) | 2.00%(4) | 75% | $271,168 | ||
2018 | $9.83 | 0.27 | (0.30) | (0.03) | (0.39) | $9.41 | (0.43)% | 0.00%(6) | 0.83% | 2.77% | 1.94% | 178% | $282,481 | ||
2017 | $9.50 | 0.24 | 0.48 | 0.72 | (0.39) | $9.83 | 8.09% | 0.66% | 0.97% | 2.56% | 2.25% | 211% | $326,857 | ||
2016 | $9.59 | 0.14 | 0.01 | 0.15 | (0.24) | $9.50 | 1.74% | 0.96% | 1.01% | 1.50% | 1.45% | 264% | $262,612 | ||
2015(5) | $10.00 | 0.10 | (0.51) | (0.41) | — | $9.59 | (4.20)% | 0.99%(4) | 1.00%(4) | 1.70%(4) | 1.69%(4) | 151% | $240,740 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2019 (unaudited). |
(4) | Annualized. |
(5) | March 19, 2015 (fund inception) through October 31, 2015. |
(6) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
18
Notes |
19
Notes |
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![]() | ||
Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92376 1906 |
![acihorizblkd43.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/acihorizblkd43.jpg)
Semiannual Report | |
April 30, 2019 | |
Real Estate Fund | |
Investor Class (REACX) | |
I Class (REAIX) | |
Y Class (ARYEX) | |
A Class (AREEX) | |
C Class (ARYCX) | |
R Class (AREWX) | |
R5 Class (ARREX) | |
R6 Class (AREDX) |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request to your appropriate contacts as listed on the back cover of this report.
You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request to your appropriate contacts as listed on the back cover of this report. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
Table of Contents |
Any opinions expressed in this report reflect those of the author as of the date of the report, and do not necessarily represent the opinions of American Century Investments® or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments disclaims any responsibility to update such opinions. These opinions may not be relied upon as investment advice and, because investment decisions made by American Century Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments fund. Security examples are used for representational purposes only and are not intended as recommendations to purchase or sell securities. Performance information for comparative indices and securities is provided to American Century Investments by third party vendors. To the best of American Century Investments’ knowledge, such information is accurate at the time of printing.
President’s Letter |
![jthomasrev0514.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/jthomasrev0514.jpg)
Dear Investor:
Thank you for reviewing this semiannual report for the period ended April 30, 2019. It provides a market overview (below), followed by a schedule of fund investments and other financial information. For additional commentary and information on fund performance, plus other investment insights, please visit our website, americancentury.com.
Improving Investor Sentiment, Dovish Central Banks Supported Widespread Gains
Stocks struggled early in the period, while bonds rallied. Mounting investor concerns about slowing global economic and earnings growth, U.S.-China trade tensions and rising U.S. interest rates triggered a broad stock market sell-off. Bonds, on the other hand, benefited, as global growth worries fueled demand for perceived safe-haven securities, driving government bond yields lower. Federal Reserve (Fed) policy also influenced the backdrop. Despite signs that growth was slowing, the Fed raised interest rates in December. Investors feared this rate increase and the Fed’s plans for two more rate hikes in 2019 were too aggressive, and risk-off investing remained in favor.
The new year brought a renewed sense of stability to the global financial markets. Investors’ worst-case fears about growth and trade eased, and corporate earnings results were generally better than expected. Equity valuations appeared attractive following the late-2018 stock market sell-off, and risk-on investing resumed. Meanwhile, the Fed changed course, ending its rate-hike campaign amid moderating global growth and inflation. The Fed's policy pivot along with dovish actions from central banks in the U.K., Europe and Japan helped drive yields lower and support the broad global investment landscape.
Overall, stocks shook off their early losses to generate solid gains for the entire six-month period. Similarly, other risk assets, including high-yield bonds, also delivered strong results. Elsewhere, global yields generally declined for the six-month period, which helped government, securitized and corporate bonds, real estate investment trusts, and other interest rate-sensitive securities generate positive returns.
Looking ahead, we expect volatility to remain a formidable factor as investors react to global growth trends, central bank policy and geopolitical developments. We believe this scenario underscores the importance of using professionally managed portfolios in pursuit of investment goals. We appreciate your continued trust and confidence in us.
Sincerely,
![image48a01.jpg](https://capedge.com/proxy/N-CSRS/0000908186-19-000115/image48a01.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Fund Characteristics |
APRIL 30, 2019 | |
Top Ten Holdings | % of net assets |
Prologis, Inc. | 8.2% |
Equinix, Inc. | 5.6% |
Equity Residential | 4.8% |
Welltower, Inc. | 4.8% |
HCP, Inc. | 4.4% |
Sun Communities, Inc. | 4.3% |
Camden Property Trust | 4.1% |
Extra Space Storage, Inc. | 4.1% |
UDR, Inc. | 4.1% |
Boston Properties, Inc. | 4.0% |
Sector Allocation | % of net assets |
Residential | 20.5% |
Retail | 16.7% |
Diversified | 15.1% |
Industrial | 15.0% |
Office | 13.2% |
Health Care | 11.0% |
Lodging/Resorts | 4.2% |
Self Storage | 4.1% |
Cash and Equivalents* | 0.2% |
*Includes temporary cash investments and other assets and liabilities. | |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 99.8% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | (0.4)% |
3
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from November 1, 2018 to April 30, 2019.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or I Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption/exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Beginning Account Value 11/1/18 | Ending Account Value 4/30/19 | Expenses Paid During Period(1) 11/1/18 - 4/30/19 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,127.00 | $6.06 | 1.15% |
I Class | $1,000 | $1,128.10 | $5.01 | 0.95% |
Y Class | $1,000 | $1,128.60 | $4.22 | 0.80% |
A Class | $1,000 | $1,125.40 | $7.38 | 1.40% |
C Class | $1,000 | $1,121.40 | $11.31 | 2.15% |
R Class | $1,000 | $1,124.20 | $8.69 | 1.65% |
R5 Class | $1,000 | $1,128.10 | $5.01 | 0.95% |
R6 Class | $1,000 | $1,129.00 | $4.22 | 0.80% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.09 | $5.76 | 1.15% |
I Class | $1,000 | $1,020.08 | $4.76 | 0.95% |
Y Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
A Class | $1,000 | $1,017.85 | $7.00 | 1.40% |
C Class | $1,000 | $1,014.13 | $10.74 | 2.15% |
R Class | $1,000 | $1,016.61 | $8.25 | 1.65% |
R5 Class | $1,000 | $1,020.08 | $4.76 | 0.95% |
R6 Class | $1,000 | $1,020.83 | $4.01 | 0.80% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. Annualized expense ratio reflects actual expenses, including any applicable fee waivers or expense reimbursements and excluding any acquired fund fees and expenses. |
5
Schedule of Investments |
APRIL 30, 2019 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 99.8% | ||||
Diversified — 15.1% | ||||
Digital Realty Trust, Inc. | 152,987 | $ | 18,008,100 | |
Equinix, Inc. | 120,382 | 54,737,695 | ||
Gaming and Leisure Properties, Inc. | 815,645 | 32,935,745 | ||
InterXion Holding NV(1) | 110,685 | 7,658,295 | ||
JBG SMITH Properties | 213,622 | 9,089,616 | ||
SBA Communications Corp.(1) | 25,075 | 5,108,530 | ||
VICI Properties, Inc. | 832,345 | 18,977,466 | ||
146,515,447 | ||||
Health Care — 11.0% | ||||
CareTrust REIT, Inc. | 736,977 | 17,871,692 | ||
HCP, Inc. | 1,418,810 | 42,252,162 | ||
Welltower, Inc. | 624,083 | 46,512,906 | ||
106,636,760 | ||||
Industrial — 15.0% | ||||
Americold Realty Trust | 1,061,787 | 33,987,802 | ||
Prologis, Inc. | 1,041,940 | 79,885,540 | ||
Rexford Industrial Realty, Inc. | 837,409 | 31,729,427 | ||
145,602,769 | ||||
Lodging/Resorts — 4.2% | ||||
Host Hotels & Resorts, Inc. | 951,797 | 18,312,574 | ||
Park Hotels & Resorts, Inc. | 214,621 | 6,885,042 | ||
Ryman Hospitality Properties, Inc. | 197,899 | 15,752,760 | ||
40,950,376 | ||||
Office — 13.2% | ||||
Alexandria Real Estate Equities, Inc. | 266,766 | 37,984,811 | ||
Boston Properties, Inc. | 283,078 | 38,957,194 | ||
Cousins Properties, Inc. | 2,104,858 | 20,143,491 | ||
Hudson Pacific Properties, Inc. | 875,572 | 30,522,440 | ||
127,607,936 | ||||
Residential — 20.5% | ||||
Camden Property Trust | 394,745 | 39,731,084 | ||
Equity Residential | 609,763 | 46,598,089 | ||
Invitation Homes, Inc. | 1,239,586 | 30,816,108 | ||
Sun Communities, Inc. | 341,390 | 42,018,281 | ||
UDR, Inc. | 880,598 | 39,582,880 | ||
198,746,442 | ||||
Retail — 16.7% | ||||
Acadia Realty Trust | 416,374 | 11,758,402 | ||
Agree Realty Corp. | 389,495 | 25,500,238 | ||
Brixmor Property Group, Inc. | 594,038 | 10,621,399 | ||
Essential Properties Realty Trust, Inc. | 776,895 | 16,066,189 |
6
Shares | Value | |||
Regency Centers Corp. | 431,479 | $ | 28,982,444 | |
Simon Property Group, Inc. | 196,112 | 34,064,654 | ||
STORE Capital Corp. | 1,061,200 | 35,359,184 | ||
162,352,510 | ||||
Self Storage — 4.1% | ||||
Extra Space Storage, Inc. | 382,504 | 39,661,840 | ||
TOTAL COMMON STOCKS (Cost $764,911,543) | 968,074,080 | |||
TEMPORARY CASH INVESTMENTS — 0.6% | ||||
Repurchase Agreement, BMO Capital Markets Corp., (collateralized by various U.S. Treasury obligations, 1.00% - 8.75%, 8/31/19 - 8/15/45, valued at $4,881,605), in a joint trading account at 2.40%, dated 4/30/19, due 5/1/19 (Delivery value $4,783,536) | 4,783,217 | |||
Repurchase Agreement, Fixed Income Clearing Corp., (collateralized by various U.S. Treasury obligations, 3.00%, 11/15/45, valued at $814,045), at 1.25%, dated 4/30/19, due 5/1/19 (Delivery value $798,028) | 798,000 | |||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 3,713 | 3,713 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,584,930) | 5,584,930 | |||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $770,496,473) | 973,659,010 | |||
OTHER ASSETS AND LIABILITIES — (0.4)% | (3,429,874 | ) | ||
TOTAL NET ASSETS — 100.0% | $ | 970,229,136 |
NOTES TO SCHEDULE OF INVESTMENTS |
(1) | Non-income producing. |
See Notes to Financial Statements.
7
Statement of Assets and Liabilities |
APRIL 30, 2019 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $770,496,473) | $ | 973,659,010 | |
Receivable for capital shares sold | 824,507 | ||
Dividends and interest receivable | 354 | ||
974,483,871 | |||
Liabilities | |||
Payable for capital shares redeemed | 3,407,718 | ||
Accrued management fees | 828,233 | ||
Distribution and service fees payable | 18,784 | ||
4,254,735 | |||
Net Assets | $ | 970,229,136 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 764,726,064 | |
Distributable earnings | 205,503,072 | ||
$ | 970,229,136 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $552,836,450 | 19,101,365 | $28.94 | |||
I Class, $0.01 Par Value | $124,366,828 | 4,284,703 | $29.03 | |||
Y Class, $0.01 Par Value | $392,635 | 13,528 | $29.02 | |||
A Class, $0.01 Par Value | $49,698,395 | 1,719,547 | $28.90* | |||
C Class, $0.01 Par Value | $6,225,519 | 221,536 | $28.10 | |||
R Class, $0.01 Par Value | $8,549,212 | 298,110 | $28.68 | |||
R5 Class, $0.01 Par Value | $5,748 | 198 | $29.03 | |||
R6 Class, $0.01 Par Value | $228,154,349 | 7,862,280 | $29.02 |
*Maximum offering price $30.66 (net asset value divided by 0.9425).
See Notes to Financial Statements.
8
Statement of Operations |
FOR THE SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends | $ | 14,408,308 | |
Interest | 41,273 | ||
14,449,581 | |||
Expenses: | |||
Management fees | 4,918,411 | ||
Distribution and service fees: | |||
A Class | 61,115 | ||
C Class | 31,016 | ||
R Class | 20,068 | ||
Directors' fees and expenses | 12,662 | ||
Other expenses | 4,897 | ||
5,048,169 | |||
Net investment income (loss) | 9,401,412 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investment transactions | 24,779,182 | ||
Change in net unrealized appreciation (depreciation) on investments | 78,804,628 | ||
Net realized and unrealized gain (loss) | 103,583,810 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 112,985,222 |
See Notes to Financial Statements.
9
Statement of Changes in Net Assets |
SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED) AND YEAR ENDED OCTOBER 31, 2018 | ||||||
Increase (Decrease) in Net Assets | April 30, 2019 | October 31, 2018 | ||||
Operations | ||||||
Net investment income (loss) | $ | 9,401,412 | $ | 20,077,234 | ||
Net realized gain (loss) | 24,779,182 | 45,288,178 | ||||
Change in net unrealized appreciation (depreciation) | 78,804,628 | (55,673,400) | ||||
Net increase (decrease) in net assets resulting from operations | 112,985,222 | 9,692,012 | ||||
Distributions to Shareholders | ||||||
From earnings: | ||||||
Investor Class | (28,721,421) | (45,370,811 | ) | |||
I Class | (5,635,578) | (9,967,018 | ) | |||
Y Class | (19,215) | (3,175 | ) | |||
A Class | (2,451,929) | (4,658,628 | ) | |||
C Class | (302,353) | (570,939 | ) | |||
R Class | (391,379) | (635,992 | ) | |||
R5 Class | (271) | (358 | ) | |||
R6 Class | (10,852,104) | (12,982,766 | ) | |||
Decrease in net assets from distributions | (48,374,250) | (74,189,687) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions (Note 5) | (73,586,560 | ) | (92,339,914) | |||
Net increase (decrease) in net assets | (8,975,588) | (156,837,589) | ||||
Net Assets | ||||||
Beginning of period | 979,204,724 | 1,136,042,313 | ||||
End of period | $ | 970,229,136 | $ | 979,204,724 |
See Notes to Financial Statements.
10
Notes to Financial Statements |
APRIL 30, 2019 (UNAUDITED)
1. Organization
American Century Capital Portfolios, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Real Estate Fund (the fund) is one fund in a series issued by the corporation. The fund’s investment objective is to seek high total investment return through a combination of capital appreciation and current income.
The fund offers the Investor Class, I Class, Y Class, A Class, C Class, R Class, R5 Class and R6 Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The fund is an investment company and follows accounting and reporting guidance in accordance with accounting principles generally accepted in the United States of America. This may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates. Management evaluated the impact of events or transactions occurring through the date the financial statements were issued that would merit recognition or disclosure.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
11
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income, if any, are generally declared and paid quarterly. Distributions from net realized gains, if any, are generally declared and paid annually. The fund may elect to treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
12
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The difference in the fee among the classes is a result of their separate arrangements for non-Rule 12b-1 shareholder services. It is not the result of any difference in advisory or custodial fees or other expenses related to the management of the fund’s assets, which do not vary by class. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that use very similar investment teams and strategies (strategy assets).
The management fee schedule range and the effective annual management fee for each class for the period ended April 30, 2019 are as follows:
Management Fee Schedule Range | Effective Annual Management Fee | |
Investor Class | 1.00% to 1.20% | 1.15% |
I Class | 0.80% to 1.00% | 0.95% |
Y Class | 0.65% to 0.85% | 0.80% |
A Class | 1.00% to 1.20% | 1.15% |
C Class | 1.00% to 1.20% | 1.15% |
R Class | 1.00% to 1.20% | 1.15% |
R5 Class | 0.80% to 1.00% | 0.95% |
R6 Class | 0.65% to 0.85% | 0.80% |
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. The plans provide that the R Class will pay ACIS an annual distribution and service fee of 0.50%. The fees are computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plans during the period ended April 30, 2019 are detailed in the Statement of Operations.
Directors' Fees and Expenses — The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. The fund’s officers do not receive compensation from the fund.
13
Interfund Transactions — The fund may enter into security transactions with other American Century Investments funds and other client accounts of the investment advisor, in accordance with the 1940 Act rules and procedures adopted by the Board of Directors. The rules and procedures require, among other things, that these transactions be effected at the independent current market price of the security. During the period, the interfund purchases and sales were $61,767 and $2,423,956, respectively. The effect of interfund transactions on the Statement of Operations was $(234,589) in net realized gain (loss) on investment transactions.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the period ended April 30, 2019 were $634,689,396 and $743,101,065, respectively.
14
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended April 30, 2019 | Year ended October 31, 2018 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 160,000,000 | 170,000,000 | ||||||||
Sold | 1,252,677 | $ | 34,536,384 | 4,229,602 | $ | 116,310,040 | ||||
Issued in reinvestment of distributions | 1,083,786 | 28,166,604 | 1,614,273 | 44,714,781 | ||||||
Redeemed | (4,906,000 | ) | (134,072,422 | ) | (8,382,683 | ) | (229,188,279 | ) | ||
(2,569,537 | ) | (71,369,434 | ) | (2,538,808 | ) | (68,163,458 | ) | |||
I Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 1,055,070 | 29,990,870 | 1,169,803 | 32,041,574 | ||||||
Issued in reinvestment of distributions | 154,341 | 4,023,784 | 277,854 | 7,719,902 | ||||||
Redeemed | (1,286,722 | ) | (35,539,306 | ) | (2,884,943 | ) | (80,309,917 | ) | ||
(77,311 | ) | (1,524,652 | ) | (1,437,286 | ) | (40,548,441 | ) | |||
Y Class/Shares Authorized | 30,000,000 | 70,000,000 | ||||||||
Sold | – | – | 12,927 | 365,126 | ||||||
Issued in reinvestment of distributions | 365 | 9,538 | 61 | 1,727 | ||||||
365 | 9,538 | 12,988 | 366,853 | |||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 170,798 | 4,698,756 | 397,807 | 10,852,882 | ||||||
Issued in reinvestment of distributions | 87,429 | 2,267,641 | 151,205 | 4,185,126 | ||||||
Redeemed | (410,234 | ) | (11,220,603 | ) | (1,434,357 | ) | (39,259,621 | ) | ||
(152,007 | ) | (4,254,206 | ) | (885,345 | ) | (24,221,613 | ) | |||
C Class/Shares Authorized | 20,000,000 | 10,000,000 | ||||||||
Sold | 3,451 | 88,903 | 12,869 | 343,278 | ||||||
Issued in reinvestment of distributions | 10,019 | 252,188 | 17,767 | 479,962 | ||||||
Redeemed | (39,507 | ) | (1,039,222 | ) | (141,209 | ) | (3,725,725 | ) | ||
(26,037 | ) | (698,131 | ) | (110,573 | ) | (2,902,485 | ) | |||
R Class/Shares Authorized | 20,000,000 | 10,000,000 | ||||||||
Sold | 54,072 | 1,452,288 | 112,256 | 3,027,976 | ||||||
Issued in reinvestment of distributions | 13,236 | 340,508 | 19,427 | 533,938 | ||||||
Redeemed | (66,766 | ) | (1,790,237 | ) | (235,998 | ) | (6,461,083 | ) | ||
542 | 2,559 | (104,315 | ) | (2,899,169 | ) | |||||
R5 Class/Shares Authorized | 20,000,000 | 30,000,000 | ||||||||
Issued in reinvestment of distributions | 11 | 271 | 13 | 358 | ||||||
R6 Class/Shares Authorized | 60,000,000 | 50,000,000 | ||||||||
Sold | 893,638 | 24,448,908 | 3,277,490 | 90,908,133 | ||||||
Issued in reinvestment of distributions | 416,006 | 10,851,834 | 468,519 | 12,982,766 | ||||||
Redeemed | (1,121,281 | ) | (31,053,247 | ) | (2,098,505 | ) | (57,862,858 | ) | ||
188,363 | 4,247,495 | 1,647,504 | 46,028,041 | |||||||
Net increase (decrease) | (2,635,611 | ) | $ | (73,586,560 | ) | (3,415,822 | ) | $ | (92,339,914 | ) |
15
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a fund’s own assumptions). |
The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 968,074,080 | — | — | ||||
Temporary Cash Investments | 3,713 | $ | 5,581,217 | — | ||||
$ | 968,077,793 | $ | 5,581,217 | — |
7. Risk Factors
The fund concentrates its investments in a narrow segment of the total market. Because of this, the fund is subject to certain additional risks as compared to investing in a more diversified portfolio of investments. The fund may be subject to certain risks similar to those associated with direct investment in real estate including but not limited to: local or regional economic conditions, changes in zoning laws, changes in property values, property tax increases, overbuilding, increased competition, environmental contamination, natural disasters, and interest rate risk.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of period end, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 795,157,965 | |
Gross tax appreciation of investments | $ | 179,839,372 | |
Gross tax depreciation of investments | (1,338,327 | ) | |
Net tax appreciation (depreciation) of investments | $ | 178,501,045 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
16
Financial Highlights |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2019(3) | $27.08 | 0.26 | 3.00 | 3.26 | (0.27) | (1.13) | (1.40) | $28.94 | 12.70% | 1.15%(4) | 1.93%(4) | 67% | $552,836 | ||
2018 | $28.71 | 0.51 | (0.18) | 0.33 | (0.71) | (1.25) | (1.96) | $27.08 | 1.11% | 1.15% | 1.88% | 148% | $586,906 | ||
2017 | $30.69 | 0.64 | 0.35 | 0.99 | (0.36) | (2.61) | (2.97) | $28.71 | 3.47% | 1.15% | 2.21% | 145% | $695,132 | ||
2016 | $29.69 | 0.41 | 1.41 | 1.82 | (0.82) | — | (0.82) | $30.69 | 6.19% | 1.14% | 1.32% | 149% | $909,921 | ||
2015 | $28.69 | 0.42 | 1.13 | 1.55 | (0.55) | — | (0.55) | $29.69 | 5.51% | 1.14% | 1.42% | 140% | $925,934 | ||
2014 | $24.56 | 0.30 | 4.29 | 4.59 | (0.46) | — | (0.46) | $28.69 | 18.89% | 1.14% | 1.16% | 127% | $1,025,749 | ||
I Class | |||||||||||||||
2019(3) | $27.16 | 0.29 | 3.01 | 3.30 | (0.30) | (1.13) | (1.43) | $29.03 | 12.81% | 0.95%(4) | 2.13%(4) | 67% | $124,367 | ||
2018 | $28.79 | 0.57 | (0.19) | 0.38 | (0.76) | (1.25) | (2.01) | $27.16 | 1.34% | 0.95% | 2.08% | 148% | $118,458 | ||
2017 | $30.77 | 0.69 | 0.36 | 1.05 | (0.42) | (2.61) | (3.03) | $28.79 | 3.67% | 0.95% | 2.41% | 145% | $166,938 | ||
2016 | $29.76 | 0.46 | 1.43 | 1.89 | (0.88) | — | (0.88) | $30.77 | 6.40% | 0.94% | 1.52% | 149% | $183,181 | ||
2015 | $28.75 | 0.51 | 1.11 | 1.62 | (0.61) | — | (0.61) | $29.76 | 5.70% | 0.94% | 1.62% | 140% | $159,721 | ||
2014 | $24.61 | 0.35 | 4.30 | 4.65 | (0.51) | — | (0.51) | $28.75 | 19.17% | 0.94% | 1.36% | 127% | $387,099 | ||
Y Class | |||||||||||||||
2019(3) | $27.15 | 0.31 | 3.01 | 3.32 | (0.32) | (1.13) | (1.45) | $29.02 | 12.86% | 0.80%(4) | 2.28%(4) | 67% | $393 | ||
2018 | $28.78 | 0.62 | (0.20) | 0.42 | (0.80) | (1.25) | (2.05) | $27.15 | 1.50% | 0.80% | 2.23% | 148% | $357 | ||
2017(5) | $28.68 | 0.27 | (0.12) | 0.15 | (0.05) | — | (0.05) | $28.78 | 0.54% | 0.80%(4) | 1.70%(4) | 145%(6) | $5 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2019(3) | $27.05 | 0.23 | 2.99 | 3.22 | (0.24) | (1.13) | (1.37) | $28.90 | 12.54% | 1.40%(4) | 1.68%(4) | 67% | $49,698 | ||
2018 | $28.68 | 0.45 | (0.19) | 0.26 | (0.64) | (1.25) | (1.89) | $27.05 | 0.86% | 1.40% | 1.63% | 148% | $50,619 | ||
2017 | $30.70 | 0.59 | 0.33 | 0.92 | (0.33) | (2.61) | (2.94) | $28.68 | 3.23% | 1.40% | 1.96% | 145% | $79,060 | ||
2016 | $29.69 | 0.34 | 1.41 | 1.75 | (0.74) | — | (0.74) | $30.70 | 5.92% | 1.39% | 1.07% | 149% | $153,281 | ||
2015 | $28.69 | 0.34 | 1.14 | 1.48 | (0.48) | — | (0.48) | $29.69 | 5.24% | 1.39% | 1.17% | 140% | $175,833 | ||
2014 | $24.55 | 0.24 | 4.30 | 4.54 | (0.40) | — | (0.40) | $28.69 | 18.59% | 1.39% | 0.91% | 127% | $175,133 | ||
C Class | |||||||||||||||
2019(3) | $26.33 | 0.12 | 2.92 | 3.04 | (0.14) | (1.13) | (1.27) | $28.10 | 12.14% | 2.15%(4) | 0.93%(4) | 67% | $6,226 | ||
2018 | $27.99 | 0.24 | (0.19) | 0.05 | (0.46) | (1.25) | (1.71) | $26.33 | 0.11% | 2.15% | 0.88% | 148% | $6,519 | ||
2017 | $30.18 | 0.37 | 0.32 | 0.69 | (0.27) | (2.61) | (2.88) | $27.99 | 2.46% | 2.15% | 1.21% | 145% | $10,025 | ||
2016 | $29.22 | 0.11 | 1.37 | 1.48 | (0.52) | — | (0.52) | $30.18 | 5.10% | 2.14% | 0.32% | 149% | $15,986 | ||
2015 | $28.25 | 0.12 | 1.13 | 1.25 | (0.28) | — | (0.28) | $29.22 | 4.47% | 2.14% | 0.42% | 140% | $17,439 | ||
2014 | $24.18 | 0.04 | 4.23 | 4.27 | (0.20) | — | (0.20) | $28.25 | 17.74% | 2.14% | 0.16% | 127% | $16,972 | ||
R Class | |||||||||||||||
2019(3) | $26.85 | 0.19 | 2.98 | 3.17 | (0.21) | (1.13) | (1.34) | $28.68 | 12.42% | 1.65%(4) | 1.43%(4) | 67% | $8,549 | ||
2018 | $28.48 | 0.38 | (0.19) | 0.19 | (0.57) | (1.25) | (1.82) | $26.85 | 0.61% | 1.65% | 1.38% | 148% | $7,989 | ||
2017 | $30.55 | 0.55 | 0.30 | 0.85 | (0.31) | (2.61) | (2.92) | $28.48 | 3.00% | 1.65% | 1.71% | 145% | $11,445 | ||
2016 | $29.55 | 0.23 | 1.43 | 1.66 | (0.66) | — | (0.66) | $30.55 | 5.64% | 1.64% | 0.82% | 149% | $19,112 | ||
2015 | $28.55 | 0.26 | 1.15 | 1.41 | (0.41) | — | (0.41) | $29.55 | 4.97% | 1.64% | 0.92% | 140% | $14,458 | ||
2014 | $24.44 | 0.16 | 4.28 | 4.44 | (0.33) | — | (0.33) | $28.55 | 18.30% | 1.64% | 0.66% | 127% | $8,743 |
For a Share Outstanding Throughout the Years Ended October 31 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R5 Class | |||||||||||||||
2019(3) | $27.16 | 0.28 | 3.02 | 3.30 | (0.30) | (1.13) | (1.43) | $29.03 | 12.81% | 0.95%(4) | 2.13%(4) | 67% | $6 | ||
2018 | $28.79 | 0.56 | (0.18) | 0.38 | (0.76) | (1.25) | (2.01) | $27.16 | 1.31% | 0.95% | 2.08% | 148% | $5 | ||
2017(5) | $28.69 | 0.25 | (0.11) | 0.14 | (0.04) | — | (0.04) | $28.79 | 0.47% | 0.95%(4) | 1.55%(4) | 145%(6) | $5 | ||
R6 Class | |||||||||||||||
2019(3) | $27.15 | 0.31 | 3.01 | 3.32 | (0.32) | (1.13) | (1.45) | $29.02 | 12.90% | 0.80%(4) | 2.28%(4) | 67% | $228,154 | ||
2018 | $28.78 | 0.61 | (0.19) | 0.42 | (0.80) | (1.25) | (2.05) | $27.15 | 1.46% | 0.80% | 2.23% | 148% | $208,351 | ||
2017 | $30.76 | 0.72 | 0.37 | 1.09 | (0.46) | (2.61) | (3.07) | $28.78 | 3.86% | 0.80% | 2.56% | 145% | $173,431 | ||
2016 | $29.75 | 0.51 | 1.43 | 1.94 | (0.93) | — | (0.93) | $30.76 | 6.57% | 0.79% | 1.67% | 149% | $149,866 | ||
2015 | $28.74 | 0.49 | 1.17 | 1.66 | (0.65) | — | (0.65) | $29.75 | 5.86% | 0.79% | 1.77% | 140% | $174,257 | ||
2014 | $24.61 | 0.33 | 4.35 | 4.68 | (0.55) | — | (0.55) | $28.74 | 19.31% | 0.79% | 1.51% | 127% | $29,151 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended April 30, 2019 (unaudited). |
(4) | Annualized. |
(5) | April 10, 2017 (commencement of sale) through October 31, 2017. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended October 31, 2017. |
See Notes to Financial Statements.
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain retirement accounts are subject to federal income tax withholding, unless you elect not to have withholding apply*. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time and change your withholding percentage for future distributions.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
*Some 403(b), 457 and qualified retirement plan distributions may be subject to 20% mandatory withholding, as they are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the "About Us" page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q or as an exhibit to its reports on Form N-PORT. The fund’s Forms N-Q and Form N-PORT reports are available on the SEC’s website at sec.gov. The fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Contact Us | americancentury.com | |
Automated Information Line | 1-800-345-8765 | |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 | |
Investors Using Advisors | 1-800-378-9878 | |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 | |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 | |
Telecommunications Relay Service for the Deaf | 711 | |
American Century Capital Portfolios, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2019 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-92367 1906 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for semiannual report filings.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are |
effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century Capital Portfolios, Inc. | ||
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
Date: | June 27, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | |
Name: | Jonathan S. Thomas | |
Title: | President | |
(principal executive officer) | ||
Date: | June 27, 2019 |
By: | /s/ R. Wes Campbell | |
Name: | R. Wes Campbell | |
Title: | Treasurer and | |
Chief Financial Officer | ||
(principal financial officer) | ||
Date: | June 27, 2019 |